Vitesco Technologies has said group sales in the third quarter came in at €2.30 billion (Q3 2021: €1.91 billion). Adjusted for changes in the scope of consolidation and exchange-rate effects, sales increased by 13.6 percent, the company said.
Electrification sales amounted to €230 million in the third quarter. “We are thus on track to achieve the targeted €1 billion in electrification sales for the full year 2022,” says CEO Andreas Wolf. Adjusted operating profit increased year-on-year to €47.9 million (Q3 2021: €24.5 million), corresponding to an adjusted EBIT margin of 2.1 percent (Q3 2021: 1.3 percent). The net income increased to ¬ €13.8 million (Q3 2021: -€91.5 million) and to earnings per share of €0.34 (Q3 2021: -€2.29), respectively.
“In the third quarter of 2022, high inflationary effects in the form of increased material, energy, and transport costs, among other factors, continued to impact the company’s overall results,” said CFO Werner Volz.
Adjusted operating profit increased year-on-year to €47.9 million (Q3 2021: €24.5 million), corresponding to an adjusted EBIT margin of 2.1 percent (Q3 2021: 1.3 percent). There was a net loss in the quarter, but an improvement (net income was -€13.8 million; Q3 2021: -€91.5 million).
Due in particular to the further build-up of inventories, free cash flow was negative at -€16.3 million.
Vitesco said that in a market environment that remains challenging, Vitesco Technologies has a strong order intake. The volume of new orders booked in the third quarter came in at €4.3 billion, of which €3.2 billion was for electrification products in all business units. “This means we have achieved an electrification order intake of almost €10 billion in the first nine months of 2022,” says CEO Andreas Wolf.
This order volume from the past quarter also includes an order worth around €600 million from a global German automotive manufacturer for Vitesco Technologies’ battery management system (BMS ). As Wolf puts it, “This means that, so far in 2022, we have booked orders for our battery management system worth a total value of €3 billion.”
The Electrification Technology business unit generated sales of €147.2 million in the third quarter of 2022 (Q3 2021: €128.9 million). Organic sales grew by 16.0 percent. Adjusted operating profit decreased to -€71.0 million (Q3 2021: -€69.2 million). The business unit continues to be burdened by ramp-up costs and the research and development expenses. In addition, production volumes in China had to be reduced for a short period of time due to capacity expansions. The business unit continues to achieve high order intake, amounting to €1.9 billion in the third quarter.
In the Electronic Controls business unit, sales in Q3 2022 were €1.03 billion (Q3 2021: €806.8 million). Organic growth amounted to 21.2 percent. Adjusted operating profit was €44.5 million (Q3 2021: €30.1 million), corresponding to an adjusted EBIT margin of 4.3 percent (Q3 2021: 3.8 percent). Improved availability of semiconductors and the successive passing on of additional costs to customers led to an increase in sales. Nevertheless, a lack of customer-specific electronic parts in particular continues to pose a major challenge for the business unit, Visteon said.
In the current fiscal year 2022, Vitesco Technologies expects global vehicle production to increase by 5 to 7 percent (previously: 3 to 5 percent) compared to the previous year. For the European market, a decline between -1 to -3 percent (previously: 3 to 5 percent) is expected, while double-digit growth rates (10 to 12 percent; previously: 11 to 13 percent) are still forecast for North America. According to company estimates, production figures in China have changed significantly (5 to 7 percent); previously, company estimates had assumed stagnation (-2 to 0 percent).
Due to expected higher global passenger car production figures, as well as effects from currency effects and price adjustments, Vitesco Technologies raised its 2022 sales forecast to €9.0 to 9.2 billion. Previously, the company was anticipating full-year sales of €8.6 to 9.1 billion. “Although the market environment remains challenging, particularly on the purchasing side, we can now – as the year draws to a close – specify our targets for the full year,” explains CFO Werner Volz.
However, as not all additional costs can be passed on, Vitesco Technologies expects an adjusted operating EBIT margin of 2.3 to 2.5 percent (previously: 2.2 to 2.7 percent) for the full year 2022, also considering the year-to-date performance.