TIDMTIFS
RNS Number : 2784R
TI Fluid Systems PLC
04 November 2021
Released: 04 November 2021
TI Fluid Systems plc
Q3 2021 Trading Update
TI Fluid Systems plc, a leading global manufacturer of highly
engineered automotive fluid storage, carrying, delivery and thermal
management systems for light vehicles issues this trading update
for the third quarter and nine months ended 30 September 2021.
Summary
-- The Group's revenue for the nine months through September
2021 was up 11.7% at reported rates (13.7% at constant currency)
compared to the same period last year and outperformed global light
vehicle production growth by a robust 4.2% or 420 basis points
(bps) at constant currency
-- Q3 global light vehicle production volumes were down 19.7%,
with the Group's revenue down 14.7% at constant currency compared
to the same period last year and 14.4% at reported rates,
outperforming global light vehicle production volumes by 500 bps at
constant currency driven by fluid handling content on electric
vehicles (EV) and higher content on hybrid electric vehicles
(HEV)
-- Good progress on EV business awards with incremental lifetime
revenue of EUR232M in Q3, confirming the Group's strength in
executing its electrification strategy
-- Structural cost adjustment program in progress to respond to
short-term market conditions and manage the transition to
electrification
-- Despite short-term market disruption, the Group continues to
show resilience and expects to finish the year with continued
outperformance of global light vehicle production and a high single
digit Adjusted EBIT Margin at, or slightly above, 7%
Note : All production volume outperformance metrics herein are
based on IHS Markit, October 2021, and Company estimates
Q3 Trading Results
Global light vehicle production volumes in Q3 2021 continue to
be impacted by microchip shortages and supply chain disruptions and
were down 19.7% compared to Q3 2020.
Additional to the production volume impact of the shortages and
disruptions, customer releases (call offs) have been highly
volatile with significant changes late in the order cycle which the
Group is managing together with its customer base.
Overall, Q3 2021 Group revenue was lower by 14.4% year over year
at reported rates, or 14.7% year over year at constant currency,
due to the lower production volumes, which represented a robust
outperformance of 500 bps compared to the change in global light
vehicle production for the quarter.
We believe that our revenue outperformance is driven by our
materializing electrification strategy.
By segment, on a constant currency basis, FCS Q3 year over year
revenue declined by 12.3% while FTDS Q3 revenue declined 17.7%.
By region, on a constant currency basis, Q3 2021 revenue was
lower by 12.5% in Europe and Africa, 20.4% in North America, and
13.1% in Asia Pacific.
Nine months ended 30 September 2021
The Group achieved revenue of EUR2,179.6 million in the nine
months ended 30 September 2021, reflecting an 11.7% increase from
the same period in 2020. On a constant currency basis, revenue
increased by 13.7% year over year and outperformed global light
vehicle production growth by 420 bps.
9 months 9 months
ended ended
--------------------------------- --------- -------------
% Change
at constant
EURm Sep 20 Sep 21 % Change currency
--------------------------------- --------- --------- --------- -------------
Group Revenue 1,950.7 2,179.6 11.7% 13.7%
--------- --------- --------- -------------
By Segment
--------- --------- --------- -------------
Fluid Carrying Systems ("FCS") 1,076.9 1,186.8 10.2% 12.8%
--------- --------- --------- -------------
Fuel Tank and Delivery Systems
("FTDS") 873.8 992.8 13.6% 14.7%
--------- --------- --------- -------------
By Region
--------- --------- --------- -------------
Europe and Africa 727.4 862.4 18.6% 18.6%
--------- --------- --------- -------------
Asia Pacific 680.7 756.8 11.2% 10.9%
--------- --------- --------- -------------
North America 515.6 525.1 1.8% 8.4%
--------- --------- --------- -------------
Latin America 27.0 35.3 30.7% 49.3%
--------- --------- --------- -------------
Revenue by Segment
FCS revenue increased by 12.8% at constant currency and
outperformed the growth in global light vehicle volume production
by 330 bps. The segment delivered double digit positive growth,
primarily driven by execution of the electrification strategy and
related program launches.
FTDS revenue increased by 14.7% at constant currency, an
outperformance of 520 bps compared to global light vehicle
production growth as the segment continues to benefit from business
launches in Europe and North America as well as favourable mix.
Revenue by Region
In Europe and Africa, revenue increased by 18.6% year over year
at constant currency and outperformed light vehicle production
volume in that region by 1,170 bps, benefitting from new thermal EV
and HEV business wins.
Asia Pacific revenue increased by 10.9% year over year at
constant currency, outperforming light vehicle production volume
growth in that region by 30 bps, reflecting by various disruptions
to the supply chain in the region and cyclic programme ramp downs
in China.
In North America revenue increased by 8.4% year over year at
constant currency and outperformed light vehicle production volume
growth in that region by 160 bps, mainly resulting from new
business launches in FTDS.
Organisation
As previously announced, Hans Dieltjens assumed the role of
Chief Executive Officer on 1 October 2021 following the retirement
of Bill Kozyra.
Outlook
The Group's performance in Q3 2021 reflected lower global light
production volumes combined with a high volatility of customer
releases. It is expected that these challenges will continue
through year end and into 2022 with global light vehicle production
volumes now forecasted to return to pre-COVID levels in 2023.
IHS Markit's latest 2021 global light vehicle production volume
forecast, as of October, indicates 74.8M units for the year down
from the 82.0M units forecast in July, a 7.2M or 8.8%
reduction.
In response to the well-publicised market issues, the Group has
undertaken a range of actions at all levels of the organisation to
offset the impacts of these market conditions.
Whilst we recognise the ongoing market risks, the Group
continues to show resilience and expects to finish the year with a
robust outperformance of global light vehicle production volume and
deliver a high single digit Adjusted EBIT margin at, or slightly
above, 7%. In addition, our earnings are expected to support the
strong Adjusted Free Cash Flow generation rate seen historically
albeit reflecting the effect of reduced revenue.
Trading update call
TI Fluid Systems plc is holding a call for analysts and
investors at 09:00am UK time today.
Conference Call Dial-In Details:
UK: +44 (0)330 336 9105
Conference Code: 9626307
The audio recording will be available on www.tifluidsystems.com
later today.
Enquiries
TI Fluid Systems plc
Pilar Riesco
Investor Relations
Tel: +34 607 577 830
FTI Consulting
Richard Mountain
Nick Hasell
Tel: +44 (0) 20 3727 1340
Cautionary Statement
This announcement contains certain forward-looking statements
with respect to the financial condition, results of operations and
business of TI Fluid Systems plc (the "Company"). The words
"believe", "expect", "anticipate", "intend", "estimate",
"forecast", "project", "will", "may", "should" and similar
expressions identify forward-looking statements. Others can be
identified from the context in which they are made. By their
nature, forward-looking statements involve risks and uncertainties,
and such forward-looking statements are made only as of the date of
this announcement. Accordingly, no assurance can be given that the
forward-looking statements will prove to be accurate, and you are
cautioned not to place undue reliance on forward-looking statements
due to the inherent uncertainty therein. Past performance of the
Company cannot be relied on as a guide to future performance.
Nothing in this announcement should be construed as a profit
forecast.
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