The Auto Supplier’s Profit Slumped in the Past Six Months
Material shortages will probably hold back Hella for a long time to come…
The auto supplier’s profit slumped in the past six months. Hella boss Breidenbach does not expect a significant market recovery until mid-2023.
Dusseldorf Delivery bottlenecks and increased costs brought about a slump in profits for the automotive supplier Hella in the first six months of the financial year.
According to company boss Rolf Breidenbach, an end to the misery will still be a long time coming. “We do not expect the market to recover in the second half of our fiscal year,” said the manager on Thursday.
From summer onwards, there may be a “slight improvement”. But a significant market recovery is only expected from mid-2023. Breidenbach expects advantages from the merger with the French automotive supplier Faurecia.
Especially in the area of purchasing, the board sees opportunities with the new parent company to get better conditions. “After the closing, we want to move on to realizing these things very quickly,” said the manager. He expects the takeover to be finalized by the end of January. The French have secured around 80 percent of Hella.
“All over the world, our plants operate in stop-and-go mode,” said Chief Financial Officer Bernard Schaferbarthold. That is inefficient and burdens not only the increased material, logistics and energy costs. In the first six months of the 2021/22 financial year, operating profit (EBIT) slumped to 156 (previous year: 269) million euros. Sales fell by 2.6 percent to 3.0 billion euros. This means that Hella has developed significantly better than the market.
Breidenbach reaffirmed its annual targets that were already reduced in November. Accordingly, the management board is aiming for adjusted sales between 5.9 and 6.2 billion euros and an adjusted operating return on sales (EBIT margin) of 3.5 to 5.0 percent.
The bottlenecks, especially in chips but also in plastics, are causing problems for the automotive industry worldwide. The carmakers therefore had to cut back their production. Volkswagen’s sales, for example, fell to their lowest level in ten years.
The Auto Supplier's Profit Slumped in the Past Six Months - /10
The auto supplier's profit slumped in the past six months. Hella boss Breidenbach does not expect a significant market recovery until mid-2023.