-First-quarter revenues drop 7.7%
-Lower anticipated global light vehicle production volumes
-Full-year guidance maintained
Global manufacturer of automotive fluid storage and delivery systems TI Fluid Systems (TIFS) said continued supply chain disruptions and Covid-19 lockdowns in China reduced first-quarter revenues through March by 4.1% to €755 million.
In constant currencies revenues declined by 7.7% year-on-year, underperforming the global light vehicle production market by 3.2%, a key performance benchmark for the company.
The company expects first-half margins to be modestly lower than the second half of 2021 due to continued supply chain disruption and inflationary pressures.
After gaining 20% over the past week, the shares reversed sharply on Tuesday, losing 15% to 159.4p.
LOWER PRODUCTION VOLUMES
More disappointingly, TIFS said it anticipates annual global light vehicle production volumes to be below 2021 levels. The firm is nevertheless sticking to prior full-year guidance.
It expects to outperform the underlying market and achieve historical levels of cash conversion with margins ‘slightly below’ last year.
Margins are expected to improve in the second half as customer pricing recoveries are realised.
ELECTIFICATION MOMENTUM
The company’s push into the electric vehicle market continues to be a tail wind for the fuel carrying systems division which outperformed the underlying market by 2.6%.
This division manufactures brake and fuel lines and thermal management fluid systems for hybrid electric vehicles as well as battery electric vehicle thermal management products.
The fuel tank and delivery system business was most impacted by Covid-19 shutdowns in China, resulting in growth almost 10% below the underlying market.
Geographically, Europe and Africa outperformed the global light production market by 5.6%, benefitting from new thermal hybrid electric and battery electric vehicle programs.
Asia Pacific and the US underperformed their respective local markets by 7.9% and 1.8% respectively. The US underperformance was due to anticipated lower launch activity.
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