Q3 2024: ElringKlinger records solid results amid difficult conditions

Q3 2024: ElringKlinger records solid results amid difficult conditions

• Group revenue at EUR 441 million (Q3 2023: EUR 452 million) in third quarter of 2024 against challenging backdrop; slight quarter-on-quarter revenue growth in organic terms
• Adjusted EBIT margin at 5.2% (Q3 2023: 5.0%); ElringKlinger on target with adjusted EBIT margin of 5.1% in year to date
• Net financial liabilities scaled back to EUR 350 million (Sept. 30, 2023: EUR 366 million); net debt-to-EBITDA ratio reduced to 1.7 (Sept. 30, 2023: 1.8)
• Group hones its profile by divesting itself of two companies based in Sevelen (CH) and Buford (USA)

Dettingen/Erms (Germany), November 12, 2024 +++ ElringKlinger AG (ISIN DE0007856023 / WKN 785602) has published its results for the third quarter of 2024. The Group generated revenue of EUR 440.8 million (Q3 2023: EUR 451.6 million) in the third quarter of 2024. Adjusted for currency effects, revenue in the third quarter of 2024 amounted to EUR 452.2 million, which corresponds to slight organic revenue growth of 0.1% compared to the same period of the previous year. In the first nine months of 2024, Group revenue totaled EUR 1,351.1 million (9M 2023: EUR 1,408.1 million). In organic terms, nine-month sales were 2.6% lower than in the same period of the previous year. Alongside the direction taken by foreign exchange rates, changes in customer call-off volumes relating to individual series production projects for e-vehicles and in the area of commercial vehicles had a dampening effect on Group revenue.

Commenting on the results, Thomas Jessulat, CEO of ElringKlinger, said: “Operating in a challenging environment, we recorded a solid third-quarter performance. As regards earnings, we are on track with an adjusted EBIT margin of 5.2% in the quarter just ended and 5.1% in the first nine months. The marked increase in order intake reflects in particular the continued ramp-up of series production in our battery business. In the context of transformation, we have taken a determined approach to implementing our SHAPE30 strategy and have further sharpened our corporate profile by divesting ourselves of the companies in Sevelen and Buford." Following the signing of the sales agreement for the two Group companies, the transaction is expected to be closed by the end of 2024.

Robust revenue performance in the quarter

In the third quarter of 2024, the ElringKlinger Group generated revenue of EUR 140.1 million (Q3 2023: EUR 137.4 million) in the Rest of Europe, its strongest region in respect of revenue, which corresponds to an increase of 2.0%, whereas European automobile production (excluding Germany and Russia) declined by 12.0% according to industry data provider S&P Global Mobility. In Germany, revenue expanded by 10.6% to EUR 97.9 million in the third quarter (Q3 2023: EUR 88.5 million), which was in excess of the market growth rate of 8.2%. In the Asia-Pacific region, meanwhile, ElringKlinger generated revenue of EUR 67.7 million between July and September 2024 (Q3 2023: EUR 79.8 million), which mirrors the trend in the first half of the year. With revenue totaling EUR 106.7 million in the quarter just ended (Q3 2023: EUR 118.6 million), North America is the Group's second-strongest region. Revenue from sales in the region encompassing South America and Rest of the World grew by EUR 1.2 million to EUR 28.5 million in the third quarter of 2024 (Q3 2023: EUR 27.3 million).

Adjusted EBIT margin on track for annual target

In the third quarter of 2024, the ElringKlinger Group generated earnings before interest, taxes, depreciation, and amortization (EBITDA) of EUR 51.2 million (Q3 2023: EUR 47.7 million), a year-on-year improvement of 7.3%. The Group posted adjusted EBIT of EUR 23.0 million (Q3 2023: EUR 22.7 million) in the quarter just ended, resulting in an adjusted EBIT margin of 5.2% (Q3 2023: 5.0%). Alongside the decline in revenue, earnings were influenced by the favorable direction taken by material prices and a change in the revenue mix. In the first nine months, adjusted EBIT amounted to EUR 69.5 million (9M 2023: EUR 73.9 million); the adjusted EBIT margin stood at 5.1% (9M 2023: 5.2%), i.e., fully on track when it comes to achieving the annual target of around 5%. 

Affected primarily by non-cash impairment losses of EUR 58.1 million recognized in the third quarter in connection with the sale of the two Group companies, earnings per share in the first nine months of 2024 and the third quarter of 2024 were down markedly on the prior-year figures at EUR -0.52 and EUR -0.89 per share respectively (9M 2023: EUR 0.27 and Q3 2023: EUR 0.12).

Equity ratio up slightly, net financial liabilities scaled back

At 44.0%, the ElringKlinger Group's equity ratio at the end of the third quarter was up slightly on the prior-year figure (Sept. 30, 2023: 43.7%). Net financial liabilities were scaled back by 4.6% to EUR 349.6 million as of September 30, 2024 (Sept. 30, 2023: EUR 366.3 million). This contributed to an improved net debt-to-EBITDA ratio of 1.7, compared to 1.8 as of September 30, 2023.

Slight increase in investments in property, plant, and equipment, operating free cash flow down

Payments for investments in property, plant, and equipment amounted to EUR 18.6 million in the third quarter of 2024 (Q3 2023: EUR 16.7 million) and EUR 58.2 million in the first nine months of 2024 (9M 2023: EUR 46.4 million).

Overall, operating free cash flow for the first nine months of 2024 stood at EUR -24.4 million, which constitutes a tangible decline compared to the same period of the previous year (9M 2023: EUR -4.9 million). In the third quarter of 2024, operating free cash flow amounted to EUR -14.1 million (Q3 2023: EUR 11.7 million), which was attributable in part to the increase in receivables from customers on the back of buoyant September sales.

Guidance revised, earnings outlook confirmed
Conditions within the economic arena remain challenging. Among the news items grabbing the global headlines at present are the geopolitical conflicts in Ukraine and the Middle East as well as increasingly hawkish trade policy measures, particularly with regard to the international automotive industry. While pundits are predicting solid growth for the global economy as a whole, expectations for 2024 have recently been revised downwards in the Group's home region of Germany. Global automotive production is set to decline by 2.2% in 2024 according to S&P Global Mobility.

The Group revised its annual guidance for 2024 in its announcement dated October 7, 2024. While the adjusted EBIT margin for the current financial year is still expected to be around 5% of consolidated revenue, the Group expects ROCE for 2024 to be significantly below the previous year's level of 5.6%. The Group expects revenue to be positioned slightly below the previous year's level in organic terms. In addition, projected operating free cash flow is likely to be just within positive territory. Expectations with regard to the other key financials in 2024 can be confirmed in line with the guidance provided in the outlook section of the 2023 annual report.

Key financials for the third quarter and the first nine months of 2024

* Key metrics including assets and liabilities held for sale

For further information, please contact:

ElringKlinger AG  |  Strategic Communications
Dr. Jens Winter
Ph.: +49 7123 724-88335   |   E-mail: jens.winter@elringklinger.com

About ElringKlinger AG

As an independent supplier operating worldwide, the ElringKlinger Group has established itself as a powerful and trusted partner to the automotive industry – acknowledged for its exceptional depth of expertise. Our product portfolio encompasses innovative solutions for passenger cars and commercial vehicles powered by electric motors, hybrid technology, or combustion engines. Alongside the powertrain, other areas of application include the underbody, chassis, braking system, interior, and vehicle body. We were among the frontrunners when it came to positioning ourselves as a specialist in the field of e-mobility – with pioneering battery and fuel cell technology, and associated components and assemblies, such as plastic housings, and punched and formed metal parts.

Customized lightweight components engineered by ElringKlinger can be used throughout the entire vehicle; they deliver tangible benefits in terms of weight reduction, efficiency, and functional integration, especially in e-mobility applications. We offer specifically adapted sealing systems, thermal, and acoustic shielding parts, and dynamic drive components for a wide range of applications and for any type of drive technology. Additionally, we serve the aftermarket in more than 140 countries with an extensive range of spare parts.

This is complemented by state-of-the-art tooling technology and products made from high-performance plastics – tailored to the requirements of the automotive industry and other sectors. Building on our excellence in the field of components and systems, we are also maintaining our forward momentum in the non-automotive sector.

These efforts are supported by a dedicated workforce of around 9,600 people employed within the ElringKlinger Group. Operating at more than 40 sites worldwide, ElringKlinger has established a global presence and is closely aligned with its customers in all major automotive regions.

Legal notice

This release contains forward-looking statements. These statements are based on the expectations, market assessments, and forecasts of the Management Board and the information currently available to it. These forward-looking statements shall, in particular, not be construed as guarantees of future developments and results referred to therein. Although the Management Board is of the firm opinion that the statements made and their underlying beliefs and expectations are realistic, they are based on assumptions that may prove to be incorrect. Future results and developments depend on a variety of factors, risks, and uncertainties that may lead to changes in the expectations and judgments that have been expressed. These factors include, for example, changes in general economic and business conditions, fluctuations in exchange rates and interest rates, lack of acceptance of new products and services, and changes in business strategy.