TI Fluid Systems PLC Q1 2021 Trading Update (2844Y)
12 May 2021 - 4:00PM
UK Regulatory
TIDMTIFS
RNS Number : 2844Y
TI Fluid Systems PLC
12 May 2021
12 May 2021
TI Fluid Systems plc
Q1 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 a trading update for
the three months ended 31 March 2021.
Group Results
The Group achieved revenue of EUR787.0 million in the first
quarter, reflecting a 9.7% increase from the first quarter of 2020
as revenue continues to pick up in line with recovery in light
vehicle production volumes. On a constant currency basis, revenue
increased by 14.2% year over year and outperformed global light
vehicle production by 0.2%.
3 months 3 months
ended ended
-------------------------------- --------- -------------
% Change
at constant
EURm Mar 20 Mar 21 % Change currency
-------------------------------- --------- --------- --------- -------------
Group Revenue 717.3 787.0 9.7% 14.2%
--------- --------- --------- -------------
By Region
--------- --------- --------- -------------
Europe and Africa 303.3 320.3 5.6% 5.9%
--------- --------- --------- -------------
Asia Pacific 181.5 263.6 45.2% 49.5%
--------- --------- --------- -------------
North America 219.4 190.2 -13.3% -5.2%
--------- --------- --------- -------------
Latin America 13.1 12.9 -1.2% 33.1%
--------- --------- --------- -------------
By Segment
--------- --------- --------- -------------
Fluid Carrying Systems ("FCS") 396.8 418.8 5.6% 10.9%
--------- --------- --------- -------------
Fuel Tank and Delivery Systems
("FTDS") 320.5 368.2 14.9% 18.1%
--------- --------- --------- -------------
Revenue by Region
In Europe and Africa, revenue increased by 5.9% at constant
currency and outperformed light vehicle production volume in that
region by 6.8%, benefitting from new thermal BEV business wins. The
outperformance is also a reflection of largely uninterrupted
trading in 2021 compared to the prior year when factory shut downs
began towards the end of the quarter.
Asia Pacific revenue continues to be strong and increased by
49.5% at constant currency, outperforming light vehicle production
volume in that region by 16.9%, again reflecting a full quarter of
trading compared to the prior year where factory shutdowns
commenced in January 2020. Both businesses have managed to stay
well ahead of the market due to the impact of new business
launches, particularly in China.
In North America revenue decreased by 5.2% at constant currency
and slightly underperformed light vehicle production volume in that
region by 0.7%. The underperformance was caused by planned ramp
down of powertrain programmes, which offset the favourable impact
of new business launches in FTDS.
Revenue by Segment
FCS revenue increased by 10.9% at constant currency primarily
driven by the ramp up of new BEV wins in Europe as well as our Asia
Pacific region benefitting from higher growth in China. In spite of
the unfavourable impact of powertrain programme ramp downs in North
America, the segment shows double digit positive growth.
FTDS revenue increased by 18.1% at constant currency as the
segment continues to benefit from s uccessful business launches in
Asia Pacific and North America.
Outlook
The Group has made a strong start to the year and the outlook
guidance issued on 16 March 2021 remains unchanged. Annual global
light vehicle production volumes are forecasted to continue to
recover during 2021, and potentially return to pre-Covid levels by
2022. IHS-Markit's 2021 light vehicle production volume forecasts
continue to show volatility in quarterly phasing as a result of
supply related constraints impacting specific OEM plant uptime
scheduling. However, despite this volatility, we remain confident
that our full year 2021 revenue will outperform global light
vehicle production volumes and with these recovering volumes and
the benefits arising from the restructuring program started in
2020, we continue to target a high single digit adjusted EBIT
margin. These earnings will support the Adjusted Free Cash Flow
generation similar to pre-COVID levels and a resumption of the
dividend policy targeting a pay-out ratio of 30% of Adjusted Net
Income.
Re-financing:
On 16 April 2021, TIFS issu ed its inaugural European eight year
unsecured bond for proceeds of EUR600 million which were used to
repay portions of its USD and EUR secured term loans. In addition,
the USD and EUR secured term loans and the $225 million revolving
credit facility were repriced and maturities extended by two years
from 2024 to 2026. The transaction served to diversify, stagger and
extend the average maturity, from four years to seven years, of the
TIFS debt portfolio. In addition, the weighted average cost of debt
was reduced to 3.6% from 4.5%, which is expected to reduce annual
interest expense by EUR10 million. Both Moody's and Standard and
Poors (S&P) rating agencies viewed the transaction as credit
positive, with TIFS receiving an Outlook upgrade to Stable from
Negative from S&P. The highly successful transaction is a
testament to the market's recognition of the excellent performance
the global TIFS team has delivered despite the challenges of these
unprecedented times.
Capital Markets Event Feedback
We were pleased to hold our 2021 Capital Market Event on 13
April where we met with over 90 investors to provide an update on
our company strategy and technology, which we named "Fluid
Evolution". Our audience was impressed with our progress in
developing and selling products to meet our customers electric
vehicle needs. A replay of our presentation can be found on our
investor relations page of our website at
https://investors.tifluidsystems.com/reports-and-presentations/2021
where you can learn more about our strategy and key technologies of
our "Fluid Evolution". We remain excited of the execution of our
strategy that has led to so much success.
We remain confident about the execution of our strategy, which
is already delivering successfully and look forward to providing
more information on the progress of the business at the time of our
half year results, which we are planning to release in August.
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: 2997305
The audio recording will be available on www.tifluidsystems.com
later today.
Enquiries
TI Fluid Systems plc
David J Royce
Investor Relations
Tel: +1 248 376 8624
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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