REG - TI Fluid Systems PLC - Q3 2023 Trading Update

TI Fluid SystemsAnnouncement

02/11/2023 07:00

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RNS Number : 1090S  TI Fluid Systems PLC  02 November 2023

Released: 2 November 2023

TI Fluid Systems plc

Q3 2023 Trading Update

Strong revenue growth, confident in 2023 outlook

 

TI Fluid Systems plc (TIFS), a global industry leader in highly engineered
automotive fluid storage, carrying, delivery and thermal management systems
for light vehicles issues, a trading update for the third quarter and nine
months ended 30 September 2023.

Highlights for the nine months ended 30 September 2023

·      Strong revenue growth year to date of 8.9%, and 12.4% at constant
currency, compared to market growth of 9.0%

·      Q3 revenue growth of 0.6%, and 7.0% at constant currency,
compared to market growth of 3.8%

·      New BEV bookings with lifetime revenue of €819 million, of
which broadly half was in China

·      Strategic progress with the opening of the Group's fourth
E-Mobility Innovation Centre in Jiading, Shanghai in October

·      Executing revised capital allocation policy - acquisition of
Cascade Engineering Europe on track to close in Q4, share buyback commenced in
October, c.€100 million term loan prepayment in August, and net leverage
reduced to 1.7x adjusted EBITDA as of 30 September

·      Remain confident in full year outlook for revenue outperformance,
adjusted EBIT margin expansion to above 7% and adjusted free cash flow
conversion of c.30% of adjusted EBITDA

 € million            9 months ended  9 months ended  % Change  % Change at         LVP


                      Sep 23          Sep 22                    constant currency   volume growth

 Group Revenue        2,619.5         2,405.9         8.9%      12.4%               9.0%
 By Segment
 FCS                  1,521.3         1,373.9         10.7%     14.3%               9.0%
 FTDS                 1,098.2         1,032.0         6.4%      9.8%                9.0%
 By Region
 Europe & Africa      1,012.7         880.9           15.0%     15.3%               12.1%
 Asia Pacific         809.0           821.8           (1.6)%    5.9%                7.3%
 North America        753.7           665.2           13.3%     15.4%               11.3%
 Latin America        44.1            38.0            16.0%     24.7%               5.9%

Notes:     LVP (Light Vehicle Production) volume herein based on S&P
Global Mobility, October 2023, and Company estimates.

Revenue Performance

Group revenue for the nine months ended 30 September 2023 was €2,619.5
million, an increase of 12.4% at constant currency, with strong growth across
both segments and all regions. Reported revenue growth was 8.9%, with a
foreign exchange headwind due to the strengthening of the Euro against most
key currencies.

Fluid Carrying Systems (FCS) revenue increased 14.3% at constant currency,
reflecting strong industry volume growth, inflationary cost recoveries and
successful launches of thermal management programmes for hybrid and battery
electric vehicles. Fuel Tanks & Delivery Systems (FTDS) revenue increased
9.8% at constant currency, well ahead of the growth in addressable markets.
This was driven by inflationary cost recoveries, and our success on hybrid
vehicle platforms.

Europe & Africa and North America delivered particularly strong growth.
This reflects market volume growth, successful thermal product launches and
inflationary cost recoveries. The impact of the UAW strike on Q3 revenue was
limited. Assuming the tentative agreements reached with the US OEMs result in
a full resolution, we expect only a modest revenue impact in Q4. In Asia
Pacific, revenue growth at constant currency was 5.9%, slightly below light
vehicle production volume growth. In China, the local OEMs have continued to
grow strongly, resulting in some ongoing unfavourable mix. This was partially
offset by new launches with Chinese OEMs which are in the ramp up phase. We
launched a further nine programmes in China in Q3, giving a total of over 30
for the year to date, and we expect further progress in Q4.

Outlook

We remain confident in our full year outlook, supported by the Group's
performance in the first nine months of 2023. We continue to expect constant
currency revenue growth outperformance compared to GLVP growth, adjusted EBIT
margin expansion to above 7%, and adjusted free cash flow to be approximately
30% of adjusted EBITDA.

Comment from Hans Dieltjens, CEO and President

"TI has delivered strong revenue growth in the first nine months of the year
and we are confident in our full year guidance for revenue outperformance,
strong EBIT margin expansion and robust cash conversion. We continue to make
strategic progress, confirmed by our bookings for electrified vehicles.

As we outlined at our Capital Markets Day in September, we are Taking the Turn
to a successful future. Our strategy is focused on capitalising on the
opportunities of electrification while leveraging the strengths of our
conventional portfolio. In doing so, we will drive sustainable growth and
return to double-digit adjusted EBIT margins in the medium term."

 

Trading update call

TI Fluid Systems plc is holding a call for analysts and investors at 11:00 am
UK time today.

 Conference Call Dial-In Details:
 United Kingdom (Local)            020 4587 0498
 United States (Local)             1 646 787 9445
 All other locations               Global Dial-In Numbers
                                   (https://urldefense.proofpoint.com/v2/url?u=https-3A__www.netroadshow.com_conferencing_global-2Dnumbers-3FconfId-3D56754&d=DwMFaQ&c=bZnDpUh0cTwskH9nIvyseq2tJ5dkOfcF56epRyP8Xxo&r=oFSattU13NDP1_QzITXZ78rfS8hWsHfhRAGpK5s14FE&m=aJ1uSfGw75DEjglT_L-zu3AA5Db97zUUc1ubCW9PvYQ6XHx_ZTTSMl7YWPS_d-kC&s=m5i2bKuLJCo0LcARaE58W2aFhJ-EH2qSS4f8ElWXTgw&e=)
 Access code:                      046071

 

You can pre-register to receive a unique PIN to dial directly into the call
using this link
(https://urldefense.proofpoint.com/v2/url?u=https-3A__www.netroadshow.com_events_login-3Fshow-3D8ee03d1a-26confId-3D56754&d=DwMFaQ&c=bZnDpUh0cTwskH9nIvyseq2tJ5dkOfcF56epRyP8Xxo&r=oFSattU13NDP1_QzITXZ78rfS8hWsHfhRAGpK5s14FE&m=aJ1uSfGw75DEjglT_L-zu3AA5Db97zUUc1ubCW9PvYQ6XHx_ZTTSMl7YWPS_d-kC&s=PMc-1K65tAGo2WKaTbJT-VFW5Dw3nUyU2UBqGJAS_Gg&e=)
.

 

An audio recording will be available on our website www.tifluidsystems.com in
due course.

 

Enquiries

 

TI Fluid Systems plc

Kellie McAvoy

Investor Relations

Tel: +44 7354 846374

 

FTI Consulting

Richard Mountain

Nick Hasell

Tel: +44  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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