Nexteer Automotive Group (1316) H2 2023 earnings summary

Executive summary

• FY2023 revenue reached a record $4.207B, up 9.6% YoY; adjusted for FX and commodities, growth was 11.1%, 170 bps above market.

• APAC revenue surpassed $1B for the first time; bookings totaled $6.1B for the third consecutive year, with 55 program launches.

• Earnings faced FX, inflation, UAW strike and supplier disruption pressures; free cash flow was positive at $105M and the balance sheet remained strong.

Financial highlights

• Revenue was $4,207M versus $3,840M in 2022; reported growth was 9.6%.

• Reported EBITDA was $347M versus $365M, down 5.0%; EBITDA margin declined to 8.2% from 9.5%.

• EBITDA adjusted for supplier disruption, UAW strike and restructuring was $422M; margin improvement was 40 bps after adjusting for one-time items.

• Net profit attributable to equity holders was $37M versus $58M; free cash flow increased to $105M from $30M.

• Operating profit was $61M versus $86M; depreciation and amortization was $285M versus $279M.

Outlook and guidance

• Global OEM production volumes are forecast to be roughly flat in 2024 versus 2023; another record revenue year is expected, driven by above-market APAC growth.

• Continued margin expansion is expected from higher revenue, fixed-cost reductions and footprint initiatives.

• 2024 business bookings target is $6B; the new Changshu plant is expected to support growth in 2025 and beyond.