Global specialist in automotive fluid storage and delivery TI Fluid Systems (TIFS) reported full-year revenues to 31 December 2019 down 1.8% to €3.4bn and operating profit down 9% to €340m, in line with guidance provided on 27 January.
The shares reversed 4% to 124.6p, and are down 46% over the last three months.
CHALLENGING BACKDROP
The company saw production volumes down 2.1%, significantly outperforming global light vehicle production volumes which declined 5.6% in 2019. Despite the uncertainty presented by the coronavirus, the firm remains confident in its ability to operate flexibly and generate positive free cash flow.
Chief executive William L. Kozyra commented, ‘we remain well positioned as a leading partner for our customer’s thermal battery electric vehicle (BEV) needs.’
STRONG CASH FLOW
The business generated strong adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of €498m which was 7% higher than analysts had pencilled in, representing a margin of 14.6%.
Adjusted free cash flow grew 17.3% to €172m and demonstrates the flexible business model that the company operates.
The group has a diversified revenue stream with no dependency on a single location and a manufacturing footprint which covers 28 countries over five continents.
While the company is taking actions to mitigate the impact from the coronavirus outbreak, some negative effects are likely over the short-term.
Looking further out the group expects to benefit from increased demand for advanced fluid handling products driven by underlying mega-trends of emission reduction, increased fuel efficiency and electrification.
The dividend was held at 8.96 cents.
