- Quarterly sales of €2.17 billion (Q2 2021: €2.09 billion); sales of €4.42 billion generated in the first half of 2022 (H1 2021: €4.40 billion)
- Adjusted EBIT for Q2 2022 of €32.9 million (Q2 2021: €64.7 million), with an adjusted EBIT margin of 1.5 percent (Q2 2021: 3.1 percent); for the six-month period, adjusted EBIT came to €78.1 million (H1 2021: €81.8 million) with a margin of 1.8 percent (H1 2021: 1.9 percent)
- New orders of around €3.7 billion in Q2 2022, of which €3.0 billion attributable to electrification products
- Sales from electrification products of €500 million in the first half of the year
REGENSBURG: Vitesco Technologies, a leading international developer and manufacturer of advanced drive technologies for sustainable mobility, published its results for the second quarter and for the first half of 2022 today. The company’s performance exceeded expectations in the second quarter despite ongoing shortages of semiconductors, production outages in China due to lockdowns, and the impact of worldwide increases in inflation. New orders at Vitesco Technologies also remained robust.
In the quarter under review, orders amounting to €3.7 billion were received, including €3.0 billion in the electrification market. The major order of €1.7 billion announced in May, which is for a battery management system that Vitesco Technologies is supplying to a global customer, was included in the volume of new orders for the second quarter of 2022.
“A major highlight was our success in signing a cooperation agreement with the Renault Group. This partnership will allow us to continue stepping up our growth in the field of electrification and work with the Renault Group to develop a power electronics solution that is unique in the market,” explained CEO Andreas Wolf. Under this partnership, the Renault Group is also entering into a multi-year agreement with Vitesco Technologies concerning power electronics for hybrid Renault vehicles. From 2025 onward, Vitesco Technologies will also supply the Renault Group with a high-voltage box for electric vehicles, which houses both a DC/DC converter and a charger.
Another solid quarter in difficult market conditions
“There were again many challenges to overcome in the second quarter. We did so by maintaining a disciplined approach to costs and focusing on operational efficiency. This enabled us to cope well with the lockdowns in China due to COVID-19, for example,” said CFO Werner Volz. “Reaching successful agreement with our customers on the first price adjustments also had a positive impact on our sales and earnings.”
Consolidated sales amounted to €2.17 billion in the second quarter (Q2 2021: €2.09 billion), a rise of almost 3.3 percent. The sales from electrification products included in this total came to €235 million. Adjusted for changes to the scope of consolidation and exchange-rate effects, sales fell by 1.4 percent. Adjusted EBIT was down compared with the prior-year period at €32.9 million (Q2 2021: €64.7 million), which equates to an adjusted EBIT margin of 1.5 percent (Q2 2021: 3.1 percent). Net income increased to €36.7 million (Q2 2021: €0.2 million), while earnings per share (EPS) rose to €0.92.
Sales for the first half of 2022 went up by 0.6 percent to €4.42 billion (H1 2021: €4.40 billion). Adjusted EBIT edged down by 4.5 percent to €78.1 million (H1 2021: €81.8 million), giving an adjusted EBIT margin of 1.8 percent (H1 2021: 1.9 percent). However, net income improved markedly from a net loss of €31.5 million in the first half of 2021 to a net income of €25.4 million in the first six months of 2022. Earnings per share stood at €0.63 for the first half of 2022.
Free cash flow amounted to €1.6 million (Q2 2021: €65.7 million). The situation remained difficult as regards the global supply of semiconductors but despite this, we still achieved a positive free cash flow, primarily as a result of non-recurring items. Furthermore, the figure for the prior-year period had been boosted by the effects of the spin-off. As of June 30, 2022, Vitesco Technologies had a sound balance sheet, with an equity ratio of 40.4 percent (Juni 30, 2021: 32.0 percent).
Significant inflation effects in the form of increased energy and transportation costs, due in no small part to Russia’s war of aggression in Ukraine, weighed on the company’s overall earnings. Lockdowns in China because of COVID-19 were also a challenge for the industry and therefore for Vitesco Technologies, especially at the start of the quarter under review. “The growth of our business in North America and the positive effects of exchange rates compensated for the lockdown-related slowdown in production that occurred in China in the second quarter,” explained CEO Andreas Wolf.
Performance of the business units
The Electrification Technology business unit achieved sales of €147.0 million in the second quarter of 2022 (Q2 2021: €147.2 million). Adjusted EBIT declined slightly to -€69.7 million (Q2 2021: -€66.1 million), equating to an adjusted EBIT margin of -47.4 percent (Q2 2021: -44.9 percent). The earnings of the Electrification Technology business unit continued to be impacted by the additional expenses incurred as a result of the situation in the semiconductor market and the increases in material prices. Demand remained high for high-voltage electric drives and power electronics, which was reflected particularly clearly by the large volume of new orders. The Electrification Technology business unit registered orders totaling €2.3 billion in the second quarter.
Sales increased in the Electronic Controls business unit in the second quarter of 2022 to €922.2 million (Q2 2021: €888.9 million). Adjusted EBIT amounted to €19.7 million (Q2 2021: €50.7 million), equating to an adjusted EBIT margin of 2.1 percent (Q2 2021: 5.8 percent). This business unit also incurred additional expenses due to the situation in the semiconductor market and increases in material prices, and these expenses weighed on earnings. Positive effects were mainly felt as a result of strong growth in the core technologies, especially in Germany and North America.
In the Sensing & Actuation business unit, sales for the second quarter of 2022 amounted to €844.4 million (Q2 2021: €807.9 million). Adjusted EBIT amounted to €84.1 million (Q2 2021: €71.2 million), equating to an adjusted EBIT margin of 10.0 percent (Q2 2021: 8.9 percent). This business unit also felt the impact of the semiconductor shortage, primarily as a result of higher material prices. The rise in demand seen in Germany and North America contributed to the improvement in earnings.
Expectations for 2022 as a whole
The company’s outlook for 2022 as a whole remains unchanged, with Vitesco Technologies anticipating sales in a range of €8.6 billion to €9.1 billion and an adjusted EBIT margin of between 2.2 percent and 2.7 percent. Free cash flow for 2022 is likely to be in excess of €50 million. The reasons why the outlook for business development was not adjusted despite reduced vehicle production figures are, in particular, supportive exchange rate developments, agreed-on price adjustments, and the continued expected improvement in semiconductor availability in the second half of the year. Given the ongoing volatile developments at the global level, such as Russia’s war of aggression in Ukraine, adjustments to production as a result of COVID-19, and the energy supply situation, the outlook continues to be subject to significant uncertainty.