Vitesco Technologies Group (VTS) Q4 2023 earnings summary

Executive summary

• FY 2023 sales were €9,233 million, within guidance; adjusted EBIT was €341 million at a 3.7% margin, with profitability and free cash flow at the upper end of updated guidance.

• Core technologies outperformed the market organically while planned Non-Core ramp-downs continued; electrification orders remained the main source of backlog growth.

• Q4 delivered the strongest adjusted EBIT result of the year, supported by customer compensation payments and R&D reimbursements.

Financial highlights

• FY 2023 sales rose to €9,233.2 million from €9,070.0 million; reported growth was 1.8% and organic growth was 4.4%.

• Adjusted EBIT increased to €341.1 million from €225.5 million; margin rose to 3.7% from 2.5%. EBIT was €172.2 million versus €143.3 million.

• Free cash flow was €84.9 million versus €123.2 million; operating cash flow rose to €629 million from €592 million, while investing cash flow was -€544 million versus -€469 million.

• Q4 sales were €2,278.0 million, down 2.9% YoY; adjusted EBIT increased to €151.3 million from €98.2 million, and margin rose to 6.6% from 4.3%.

Outlook and guidance

• FY 2024 sales guidance is €8.3–8.8 billion, adjusted EBIT margin 4.5%–5.0%, capex ratio ~7%, and free cash flow ~-€350 million.

• FY 2024 light vehicle production forecast: worldwide ~-1% to +1%; Europe -3% to -1%, North America ~0% to 2%, China ~0% to 2%, and Rest of World -3% to -1%.

• Mid-term targets remain on track for electrification and Core ICE; Non-Core phase-out is expected to continue, with 2024 sales and margin guidance reflecting further mix and ramp-down effects.