Vitesco Technologies Group (VTS) Q2 2024 earnings summary

Executive summary

• Sales for H1 2024 slightly exceeded €2 billion in Q2 and €4,016.4 million for H1, down 17% and 15.5% year-over-year respectively, mainly due to divestitures and planned declines in Contract Manufacturing.

• Adjusted EBIT margin improved to 4% in Q2, with adjusted EBIT at €82 million, driven by positive mix effects, cost containment, and improved Core ICE results.

• Electrification sales showed early recovery, reaching €348 million in Q2 and €1,519.1 million for H1, with order intake over €3 billion, including €1.3 billion from Electrification.

• Free cash flow was significantly negative at -€388 million in Q2 and -€478.1 million for H1, mainly due to changes in payment terms, higher investments, and settlements.

• Net income improved to €57.0 million from a prior loss, and EBIT rose to €58.4 million, supported by fixed cost savings.

Financial highlights

• Organic sales decreased by 11.5% year-over-year, with total sales decline mainly from Non-Core and FX effects.

• Core technologies (Electrification and Core ICE) sales reached €1.6 billion, with adjusted EBIT margin at 4.5%.

• CapEx rose to 5.9% of sales, driven by Electrification product launches and new contract investments.

• Net debt position of €189 million at end of June, with net debt/adjusted EBITDA at 0.2.

• Equity ratio remained solid at 39%–39.4%.

Outlook and guidance

• Group sales for FY 2024 now forecast at €8.1 billion ±€150 million, reflecting volatile OEM call-offs and weak demand.

• Adjusted EBIT margin expected at 4% ±0.2%, mainly due to lower sales and contribution margin.

• CapEx ratio projected at 7% of sales for the year, focused on Electrification investments.

• Free cash flow for FY 2024 expected around €-400 million, with positive cash flow anticipated in H2.

• Electrification expected to reach profitability in Q3, with further improvement in Q4.