Nexteer Automotive Group (1316) H1 2024 earnings summary

Executive summary

• Achieved record 38 program launches in H1 2024, with 32 new/conquest awards and 18 for BEV/100% EV models, led by Asia Pacific and China OEMs.

• Secured $2.1 billion in new business bookings, with 43% from Chinese NEV customers, nearly tripling year-over-year.

• Maintained focus on operational efficiency, cost reduction, digital transformation, and technology leadership, including steer-by-wire and modular EPS systems.

• Brazil flooding disrupted operations, causing revenue and earnings impact, but site fully operational by end of July.

• Net profit attributable to equity holders dropped to $15.7–16 million, mainly due to higher tax expense and intangible asset impairments.

Financial highlights

• H1 2024 revenue was $2.1 billion (US$2,098.9 million), flat year-over-year (-0.1%), with adjusted EBITDA up 6% to $197.3 million (9.4% margin).

• Gross profit increased 10.5% to $210.9 million, with gross margin improving to 10.0% from 9.1% a year ago.

• Net profit was $15.7–16 million, down $18.3 million or 53.8% YoY, impacted by impairments and higher tax.

• Free cash flow was negative $2 million, down $62 million YoY due to prior year tax refund and working capital timing.

• Ended H1 with $186 million net cash, $279.8 million cash balance, and $650 million liquidity.

Outlook and guidance

• On track for $6 billion in full-year bookings, with more sourcing decisions expected in H2.

• Revenue expected to outperform global auto production by 300 basis points, despite a 2% industry decline.

• EBITDA margin expected to finish above 10% for the full year.

• Full-year effective tax rate guided at ~35%, expected to drop to mid-high teens after 2026.

• Restructuring underway to improve profit margins and manufacturing performance.