Quarterly Report • May 12, 2023
Quarterly Report
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Sales increase in the first quarter of 2023 to €2,314.2 million (previous year: €2,258.6 million)
Vitesco Technologies achieved a solid result in the first quarter of 2023 in a persistently challenging market environment. Positive exchange rate effects supported the sales development. Despite still rising material costs, especially for semiconductors, as well as higher inflation-related personnel cost and the globally strained supply chains burdened the development at the beginning of the year.
In total, sales amounted to €2,314.2 million (previous year: €2,258.6 million), which corresponds to an increase of 2.5% compared to the same period of the previous year; adjusted for changes in the scope of consolidation and in exchange rates, sales increased by 1.4%. The Group's EBIT, adjusted for effects from changes in scope of consolidation, amortization from purchase price allocations as well as special topics, amounted to €37.1 million (previous year: €47.7 million), which corresponds to an adjusted EBIT margin of 1.6% (previous year: 2.1%). Vitesco Technologies' reported EBIT decreased to -€25.3 million (previous year: €37.6 million). During the reporting period, the net income was -€50.7 million (previous year: -€11.3 million), which corresponds to earnings of -€1.27 per share (previous year: -€0.28 per share). Mainly due to the market-related build-up of inventories and ongoing investments for the order intake of the past quarters, the free cash flow amounted to -€41.1 million (previous year: €48.2 million). As of March 31, 2023, the number of employees was at 38,215 (previous year: 37,998).
As of March 31, 2023, the Group's equity amounted to €3,030.8 million (December 31, 2022: €3,061.7 million), corresponding to an equity ratio of 39.1% (December 31, 2022: 40.3%). At the end of March 2023, Vitesco Technologies had cash and cash equivalents of €728.1 million (December 31, 2022: €781.1 million). The reduction resulted in particular from the negative free cash flow in the first quarter of 2023. Net liquidity, defined as cash and cash equivalents less financial indebtedness, was at €276.8 million (December 31, 2022: €333.4 million).
In the first quarter of 2023, Vitesco Technologies was able to acquire orders amounted to €1,429 million, of which €839 million (58%) is attributed to electrification business. For the fiscal year 2023, Vitesco Technologies expects a similarly high order intake as in the fiscal year 2022.
For the second quarter of 2023, Vitesco Technologies expects the market environment to remain challenging. Even though a slight improvement is expected, supply bottlenecks may continue to result in lower production volumes. Due to the anticipated improved material availability and the end of COVID-19 restrictions in China, a significant improvement in global light vehicle production is expected in the second quarter of 2023 compared to the same quarter of the previous year.
With regards to the business development in the first quarter of 2023 and the expectations for the second quarter of 2023, the market outlook, as well as the forecast for the expected business development of Vitesco Technologies in the fiscal year 2023, remains unchanged as described in the annual report. As with the assumptions on global vehicle production, all expectations remain subject to a high degree of uncertainty.
The electrification of the mobility market, accelerated by ongoing climate change, is an automotive megatrend. Worldwide, sales of electrified vehicles have experienced an enormous growth. Vitesco Technologies recognised this trend early on and has consistently adapted to this change.
Starting with fiscal year 2023, Vitesco Technologies has significantly strengthened its focus on the electrification business. The previous four Business Units of the Vitesco Technologies Group – Electronic Controls, Electrification Technology, Sensing & Actuation and Contract Manufacturing – have been reorganized into two new Segments: Division Powertrain Solutions and Division Electrification Solutions. The Divisions consist of dedicated Business Units. This also applies to the central functions, which have been transferred into the Divisions from the previous Business Units. With higher centralization being the advantage of the new organization, it will ensure increased responsiveness to market changes. The existing management capacities will be used in a much more targeted manner and increased transparency, especially with regards to the progress of the transformation in Powertrain Solutions and the growth of the electrification business in Electrification Solutions. Through this structural adjustment, Vitesco Technologies is further sharpening its strategic focus on powertrain electrification in order to operate even more effectively, efficiently and flexibly in the market for sustaina ble powertrain technologies.
In the first quarter of 2023, sales in the Division Powertrain Solutions amounted to €1,607.7 million (previous year: €1,638.3 million). Adjusted EBIT was at €117.3 million (previous year: €111.3 million), presenting an improved adjusted EBIT margin of 7.3% (previous year: 6.8%). The Division Powertrain Solutions experienced the effects of the shortage of semiconductors, especially due to higher material prices. The planned sales decrease in Contract Manufacturing and ramp down activities contributed to the reduction in sales.
Due to continued high demand in high-voltage electric drives, sales in the Division Electrification Solutions increased significantly. In the first quarter of 2023, the Division Electrification Solutions generated sales of €716.8 million (previous year: €634.3 million). Due to continued high ramp-up costs for electrification products, the adjusted EBIT of -€72.0 million (previous year: -€61.3 million) was below the previous year. The adjusted EBIT margin amounted to -10.0% (previous year: -9.7%) and therefore at previous year's level.
The condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). The interim consolidated financial statements were prepared in euros (€). Unless otherwise stated, all amounts are in millions (€ million). Please note that differences may occur in the use of rounded amounts and percentages (%) due to commercial rounding.
| January 1 to March 31 | ||
|---|---|---|
| € million | 2023 | 2022 |
| Sales | 2,314.2 | 2,258.6 |
| Cost of sales | -1,997.7 | -1,942.8 |
| Gross margin | 316.5 | 315.8 |
| Research and development costs | -236.5 | -241.1 |
| Distribution and logistics costs | -32.7 | -35.5 |
| General administrative costs | -62.7 | -44.5 |
| Other income | 82.3 | 95.1 |
| Other expenses | -92.4 | -52.7 |
| Income from equity-accounted investees | 0.2 | 0.5 |
| EBIT | -25.3 | 37.6 |
| Interest income | 7.8 | 4.5 |
| Interest expense | -12.4 | -12.9 |
| Effects from currency translation | 9.0 | 3.0 |
| Effects from changes in the fair value of derivative instruments, and other valuation effects | -8.4 | -10.4 |
| Financial result | -4.0 | -15.8 |
| Earnings before tax | -29.3 | 21.8 |
| Income tax | -21.4 | -33.1 |
| Net income | -50.7 | -11.3 |
| Basic earnings per share in € | -1.27 | -0.28 |
| Diluted earnings per share in € | -1.27 | -0.28 |
| January 1 to March 31 | ||
|---|---|---|
| € million | 2023 | 2022 |
| Net income | -50.7 | -11.3 |
| Items that will not be reclassified to profit or loss | ||
| Remeasurement of defined benefit plans | 1.3 | 122.1 |
| Fair value adjustments | 1.3 | 122.2 |
| Currency translation | – | -0.1 |
| Tax on other comprehensive income | 0.6 | -2.4 |
| Items that may be reclassified subsequently to profit or loss | ||
| Currency translation | 18.6 | 50.1 |
| Cash flow hedges | -0.7 | 1.6 |
| Other comprehensive income | 19.8 | 171.4 |
| Group comprehensive income | -30.9 | 160.1 |
| € million | March 31, 2023 |
December 31, 2022 |
|---|---|---|
| Goodwill | 795.8 | 816.1 |
| Other intangible assets | 234.7 | 211.4 |
| Property, plant and equipment | 2,393.0 | 2,414.6 |
| Investments in equity-accounted investees | 18.5 | 18.2 |
| Other investments | 23.8 | 23.8 |
| Deferred tax assets | 283.5 | 271.8 |
| Defined-benefit assets | 10.5 | 10.8 |
| Noncurrent derivative instruments and interest-bearing investments | 23.8 | 24.5 |
| Other noncurrent financial assets | 8.9 | 9.9 |
| Other noncurrent assets | 8.6 | 8.7 |
| Noncurrent assets | 3,801.1 | 3,809.8 |
| Inventories | 966.5 | 827.2 |
| Trade accounts receivables | 1,673.9 | 1,631.4 |
| Current contract assets | 0.5 | 0.5 |
| Other current financial assets | 94.6 | 76.2 |
| Other current assets | 335.7 | 320.9 |
| Income tax receivables | 21.3 | 14.9 |
| Current derivative instruments and interest-bearing investments | 14.6 | 19.9 |
| Cash and cash equivalents | 728.1 | 781.1 |
| Assets held for sale | 108.9 | 121.8 |
| Current assets | 3,944.1 | 3,793.9 |
| Total assets | 7,745.2 | 7,603.7 |
| € million | March 31, 2023 |
December 31, 2022 |
|---|---|---|
| Subscribed capital | 100.1 | 100.1 |
| Capital reserves | 3,487.8 | 3,487.8 |
| Retained earnings | -812.3 | -761.6 |
| Accumulated other comprehensive income | 255.2 | 235.4 |
| Equity | 3,030.8 | 3,061.7 |
| Long-term employee benefits | 539.4 | 524.3 |
| Deferred tax liabilities | 42.8 | 41.2 |
| Noncurrent provisions for other risks and obligations | 252.5 | 243.9 |
| Long-term indebtedness | 388.2 | 392.8 |
| Noncurrent contract liabilities | 23.2 | 89.4 |
| Other noncurrent liabilities | 7.8 | 6.5 |
| Noncurrent liabilities | 1,253.9 | 1,298.1 |
| Short-term employee benefits | 346.9 | 274.1 |
| Trade accounts payables | 2,126.8 | 2,003.4 |
| Current contract liabilities | 118.6 | 53.5 |
| Income tax payables | 78.2 | 72.8 |
| Current provisions for other risks and obligations | 394.0 | 423.2 |
| Short-term indebtedness | 63.1 | 54.9 |
| Other current financial liabilities | 192.6 | 201.9 |
| Other current liabilities | 63.2 | 82.1 |
| Liabilities held for sale | 77.1 | 78.0 |
| Current liabilities | 3,460.5 | 3,243.9 |
| Total equity and liabilities | 7,745.2 | 7,603.7 |
| January 1 to March 31 | ||
|---|---|---|
| € million | 2023 | 2022 |
| Net income | -50.7 | -11.3 |
| Income tax expense | 21.4 | 33.1 |
| Financial result | 4.0 | 15.8 |
| EBIT | -25.3 | 37.6 |
| Interest paid | -6.6 | -3.7 |
| Interest received | 5.3 | 3.1 |
| Income tax paid | -28.3 | -28.1 |
| Depreciation, amortization, impairment and reversal of impairment losses | 147.7 | 134.9 |
| Income from equity-accounted investees and other investments, incl. impairment and reversal of impairment losses | -0.2 | -0.5 |
| Gains/losses from the disposal of assets, companies and business operations | 36.6 | -1.0 |
| Changes in | ||
| inventories | -142.4 | -37.6 |
| trade accounts receivable | -45.8 | -121.2 |
| trade accounts payable | 121.2 | 93.0 |
| employee benefits and other provisions | 63.1 | 66.9 |
| other assets and liabilities | -48.4 | -35.2 |
| Cash flow arising from operating activities | 76.9 | 108.2 |
| Cash flow from the disposal of assets | 10.0 | 8.4 |
| Capital expenditure on property, plant and equipment, and software | -98.0 | -52.1 |
| Capital expenditure on intangible assets from development projects and miscellaneous |
-33.1 | -17.1 |
| Cash flow from the disposal of companies and business operations | -0.3 | 0.8 |
| Other investments | 3.4 | – |
| Cash flow arising from investing activities | -118.0 | -60.0 |
| Cash flow before financing activities (free cash flow) | -41.1 | 48.2 |
| Change in indebtedness | -9.5 | 184.0 |
| Cash flow arising from financing activities | -9.5 | 184.0 |
| Change in cash and cash equivalents | -50.6 | 232.2 |
| Cash and cash equivalents as at January 1 | 781.1 | 614.0 |
| Effect of exchange-rate changes on cash and cash equivalents | -4.8 | 11.2 |
| Classification assets held for sale | 2.4 | – |
| Cash and cash equivalents as at March 31 | 728.1 | 857.4 |
| Difference from | |||||||
|---|---|---|---|---|---|---|---|
| € million | Subscribed capital1 |
Capital reserves |
Retained earnings |
Remeasure ment of defined benefit retirement plans |
Currency translation |
Financial instruments |
Total |
| As at January 1, 2022 | 100.1 | 3,504.7 | -802.1 | -301.3 | 169.5 | 6.5 | 2,677.4 |
| Net income | – | – | -11.3 | – | – | – | -11.3 |
| Other comprehensive income | – | – | – | 119.7 | 50.1 | 1.6 | 171.4 |
| Group comprehensive income | – | – | -11.3 | 119.7 | 50.1 | 1.6 | 160.1 |
| As at March 31, 2022 | 100.1 | 3,504.7 | -813.4 | -181.5 | 219.6 | 8.1 | 2,837.6 |
| As at December 31, 2022 | 100.1 | 3,487.8 | -761.6 | 42.5 | 180.0 | 12.9 | 3,061.7 |
| Net income | – | – | -50.7 | – | – | – | -50.7 |
| Other comprehensive income | – | – | – | 1.9 | 18.6 | -0.7 | 19.8 |
| Group comprehensive income | – | – | -50.7 | 1.9 | 18.6 | -0.7 | -30.9 |
| As at March 31, 2023 | 100.1 | 3,487.8 | -812.3 | 44.4 | 198.6 | 12.2 | 3,030.8 |
1) Divided into 40,021,196 shares outstanding.
| € million | Powertrain Solutions | Electrification Solutions | Other/ Holding/ Consolidation |
Vitesco Technologies Group |
|---|---|---|---|---|
| External sales | 1,598.4 | 715.8 | – | 2,314.2 |
| Intercompany sales | 9.3 | 1.0 | -10.3 | – |
| Sales (total) | 1,607.7 | 716.8 | -10.3 | 2,314.2 |
| EBIT (segment result) | 56.6 | -73.7 | -8.2 | -25.3 |
| As % of sales | 3.5 | -10.3 | – | -1.1 |
| Depreciation, amortization, and impairment1 | 100.9 | 46.7 | 0.1 | 147.7 |
| Of which impairment2 | 16.9 | -0.2 | – | 16.7 |
| Capital expenditure3 | 36.0 | 69.8 | – | 105.8 |
| As % of sales | 2.2 | 9.7 | – | 4.6 |
| Operating assets (as at Mar. 31) | 1,783.4 | 1,120.7 | -90.5 | 2,813.6 |
| Number of employees (as at Mar. 31)4 | 23,462 | 14,691 | 62 | 38,215 |
| Adjusted sales5 | 1,607.7 | 716.8 | -10.3 | 2,314.2 |
| Adjusted EBIT6 | 117.3 | -72.0 | -8.2 | 37.1 |
| As % of adjusted sales | 7.3 | -10.0 | – | 1.6 |
1) Excluding impairment on financial investments.
2) Impairment also includes any required reversal of impairment losses.
3) Capital expenditure on property, plant, and equipment and software.
4) Excluding apprentices/trainees.
5) Adjusted for changes in the scope of consolidation.
6) Adjusted for amortization of intangible assets from purchase price allocation, changes in the scope of consolidation and special topics.
| € million | Powertrain Solutions | Electrification Solutions | Other/ Holding/ Consolidation |
Vitesco Technologies Group |
|---|---|---|---|---|
| External sales | 1,629.8 | 628.8 | – | 2,258.6 |
| Intercompany sales | 8.5 | 5.5 | -14.0 | – |
| Sales (total) | 1,638.3 | 634.3 | -14.0 | 2,258.6 |
| EBIT (segment result) | 103.9 | -64.0 | -2.3 | 37.6 |
| As % of sales | 6.3 | -10.1 | – | 1.7 |
| Depreciation, amortization, and impairment1 | 91.3 | 43.6 | – | 134.9 |
| Of which impairment2 | 0.3 | 0.2 | – | 0.5 |
| Capital expenditure3 | 30.3 | 42.0 | – | 72.3 |
| As % of sales | 1.8 | 6.6 | – | 3.2 |
| Operating assets (as at Mar. 31) | 1,672.4 | 972.4 | -71.4 | 2,573.4 |
| Number of employees (as at Mar. 31)4 | 23,964 | 13,965 | 69 | 37,998 |
| Adjusted sales5 | 1,628.8 | 634.2 | -13.9 | 2,249.1 |
| Adjusted EBIT6 | 111.3 | -61.3 | -2.3 | 47.7 |
| As % of adjusted sales | 6.8 | -9.7 | – | 2.1 |
1) Excluding impairment on financial investments.
2) Impairment also includes any required reversal of impairment losses.
3) Capital expenditure on property, plant, and equipment and software.
4) Excluding apprentices/trainees.
5) Adjusted for changes in the scope of consolidation.
6) Adjusted for amortization of intangible assets from purchase price allocation, changes in the scope of consolidation and special topics.
| € million | Powertrain Solutions | Electrification Solutions | Other/ Holding/ Consolidation |
Vitesco Technologies Group |
|---|---|---|---|---|
| Sales | 1,607.7 | 716.8 | -10.3 | 2,314.2 |
| Changes in the scope of consolidation1 | – | – | – | – |
| Adjusted sales | 1,607.7 | 716.8 | -10.3 | 2,314.2 |
| EBITDA | 157.5 | -27.0 | -8.1 | 122.4 |
| Depreciation, amortization and impairment2 | -100.9 | -46.7 | -0.1 | -147.7 |
| EBIT | 56.6 | -73.7 | -8.2 | -25.3 |
| Amortization of intangible assets from purchase price allocation (PPA) |
– | 0.1 | – | 0.1 |
| Special topics | ||||
| Impairment on goodwill | 16.7 | – | – | 16.7 |
| Impairment3 | 0.3 | -0.2 | – | 0.1 |
| Restructuring-related expenses | 0.6 | – | – | 0.6 |
| Severance payments | 0.6 | 1.7 | – | 2.3 |
| Gains and losses from disposals of companies and business operations |
40.2 | – | – | 40.2 |
| Other4 | 2.3 | 0.1 | 0.0 | 2.4 |
| Adjusted EBIT | 117.3 | -72.0 | -8.2 | 37.1 |
1) Changes in the scope of consolidation include additions and disposals within the scope of share and asset deals. Adjustments were made for additions during the fiscal year and for disposals in the year-over-year comparison period.
2) Excluding impairment on financial investments.
3) Impairment also includes necessary reversal of impairment losses. This item does not include impairment with regards to restructuring and impairment on financial investments.
4) Other includes expenses from the spin-off of Vitesco Technologies and transaction cost for the preparation of a disposal.
| € million | Powertrain Solutions | Electrification Solutions | Other/ Holding/ Consolidation |
Vitesco Technologies Group |
|---|---|---|---|---|
| Sales | 1,638.3 | 634.3 | -14.0 | 2,258.6 |
| Changes in the scope of consolidation1 | -9.5 | -0.1 | 0.1 | -9.5 |
| Adjusted sales | 1,628.8 | 634.2 | -13.9 | 2,249.1 |
| EBITDA | 195.2 | -20.4 | -2.3 | 172.5 |
| Depreciation, amortization and impairment2 | -91.3 | -43.6 | – | -134.9 |
| EBIT | 103.9 | -64.0 | -2.3 | 37.6 |
| Amortization of intangible assets from purchase price allocation (PPA) |
– | 0.1 | – | 0.1 |
| Changes in the scope of consolidation1 | 2.6 | 0.1 | – | 2.7 |
| Special topics | ||||
| Impairment on goodwill | – | – | – | – |
| Impairment3 | 0.3 | 0.2 | – | 0.5 |
| Restructuring | -0.3 | -1.0 | – | -1.3 |
| Restructuring-related expenses | 2.8 | – | – | 2.8 |
| Severance payments | 0.5 | 1.0 | – | 1.5 |
| Gains and losses from disposals of companies and business operations |
– | – | – | – |
| Other4 | 1.5 | 2.3 | 0.0 | 3.8 |
| Adjusted EBIT | 111.3 | -61.3 | -2.3 | 47.7 |
1) Changes in the scope of consolidation include additions and disposals within the scope of share and asset deals. Adjustments were made for additions during the fiscal year and for disposals in the year-over-year comparison period.
2) Excluding impairment on financial investments.
3) Impairment also includes necessary reversal of impairment losses. This item does not include impairment with regards to restructuring and impairment on financial investments.
4) Other includes expenses from the spin-off of Vitesco Technologies.
On February 1, 2023, a company belonging to the Division Powertrain Solutions was sold, which resulted in a loss on disposal of €40.2 million broken down as follows:
| € million | March 31, 2023 |
|---|---|
| Purchase Price | 2.4 |
| Carrying amount of the net assets sold | -15.9 |
| Loss on sale before reclassification of currency-conversion reserve | -13.5 |
| Reclassification of currency-conversion reserve | -26.7 |
| Loss on sale | -40.2 |
There were no significant effects on earnings, financial and net assets position of Vitesco Technologies Group as of March 31, 2023 in combined with the disposal of the company.
The Vitesco Technologies Group immediately reviews intangible assets, property, plant, and equipment; and goodwill as soon as there is an indication of impairment (triggering event).
As of March 31, 2023, there were indications of a possible impairment. Based on these indications and the other key assumptions for determining the recoverable amount of a cash-generating unit, such as the free cash flow, the discount rate, its parameters and the sustainable growth rates, there was an impairment of goodwill in the amount of €16.7 million (previous year: –) in the cash-generating unit Hydraulics & Turbocharger. The goodwill impairment is recognised in other expenses.
| 2023 | |
|---|---|
| Quarterly Report as at March 31, 2023 | May 12 |
| Annual General Meeting | May 17 |
| Half-Year Financial Report as at June 30, 2023 | August 10 |
| Quarterly Report as at September 30, 2023 | November 14 |
| 2024 | |
|---|---|
| Preliminary Financial Results | February |
|---|---|
| Annual Financial Press Conference | March |
| Analyst and Investor Conference Call | March |
| Quarterly Report as at March 31, 2024 | May |
| Annual General Meeting | May |
| Half-Year Financial Report as at June 30, 2024 | August |
| Quarterly Report as at September 30, 2024 | November |
The annual report, the annual financial statements, the half-year financial report and the quarterly announcements are available on the Internet under the Investors section (ir.vitesco-technologies.com).
Editorial office: Vitesco Technologies Group AG, Regensburg
Contact: Vitesco Technologies Group AG Siemensstraße 12 93055 Regensburg Deutschland
Telephone: +49 941-2031-90330 E-Mail: [email protected] vitesco-technologies.com
Board of Directors: Andreas Wolf (Chairman of the Board), Werner Volz, Ingo Holstein, Klaus Hau, Thomas Stierle
Chairman of the Board of Directors: Prof. Siegfried Wolf
Registered office: Regensburg Registry Court: Regensburg Local Court HRB 18842 VAT No. DE 327956117
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