Vitesco Technologies, a global provider of advanced drive technologies and electrification solutions, announced its financial results for the second quarter and the first half of 2024. Despite a challenging automotive market environment, the company reported an increase in profitability.
For the second quarter of 2024, Vitesco Technologies achieved consolidated sales of €2.02 billion, a decline from €2.44 billion in the same period last year. This drop was partly due to reduced orders from vehicle manufacturers and a strategic reduction in non-core business operations.
Sales of electrification products totaled €347.8 million, down from €354.3 million year-over-year. Adjusted for consolidation changes and currency effects, sales fell by 11.5 percent. However, stringent cost control measures led to an increase in adjusted EBIT to €81.7 million, up from €66.6 million, resulting in an adjusted EBIT margin of 4.0 percent compared to 2.9 percent in Q2 2023.
Over the first six months of 2024, the company’s sales reached €4.02 billion, down from €4.76 billion in the same period of the previous year. The decrease, adjusted for consolidation and exchange-rate effects, was 9.5 percent. The drop in contract manufacturing for Continental and divestitures of certain business segments significantly impacted sales. Nevertheless, adjusted EBIT improved to €114.7 million from €97.4 million, with an adjusted EBIT margin of 2.9 percent, up from 2.1 percent in H1 2023.
Free cash flow saw a significant decline to -€387.5 million in the second quarter, compared to -€20.6 million a year earlier, largely due to non-recurring costs related to Continental’s contract manufacturing. For the first half of 2024, free cash flow was -€478.1 million, down from -€61.7 million in H1 2023. Capital expenditure increased to €120.4 million from €92.8 million, reflecting a capex ratio of 5.9 percent.
Vitesco Technologies’ order intake for the second quarter was approximately €3.2 billion, with electrification components contributing €1.3 billion. The company also expanded its presence in China, launching a new battery management production facility to meet rising demand.
The Powertrain Solutions division generated sales of €1.25 billion in Q2 2024, down from €1.63 billion the previous year, due to the planned phase-out of Continental’s contract manufacturing and business divestitures. Despite this, adjusted EBIT increased to €118.1 million, resulting in a margin of 9.4 percent.
The Electrification Solutions division saw a slight decline in sales to €786.9 million, with an adjusted EBIT of -€30.9 million, reflecting an adjusted EBIT margin of -3.9 percent. CFO Sabine Nitzsche expects profitability in electrification to improve starting in the third quarter.
Looking ahead, Vitesco Technologies anticipates a challenging market environment for the remainder of 2024, with a forecast of €8.1 billion in sales and an adjusted EBIT margin of around 4.0 percent. The company also projects a free cash flow of approximately -€400 million for the year, excluding merger integration costs with Schaeffler AG.
