TIDMTIFS
RNS Number : 6785M
TI Fluid Systems PLC
25 January 2021
25 January 2021
TI Fluid Systems plc
Post Close Trading Update
TI Fluid Systems plc, a leading global manufacturer of highly
engineered automotive fluid storage, carrying, and delivery systems
and thermal management systems for light vehicles issues a trading
update for the year ended 31 December 2020, ahead of publishing
Full Year 2020 Results on 16 March 2021.
Summary
-- Continued business resilience demonstrating effective model
of cost flexibility, free cash generation, balance sheet strength
and liquidity despite significant light vehicle production decline
and global COVID-19 pandemic
-- Full year 2020 revenues anticipated to be in line with
decline in global light vehicle production volumes with full year
Adjusted EBIT margin % estimated to be slightly better than
expected
-- Estimated strong cash generation in Q4 2020 resulting in full
year Adjusted Free Cash flow well ahead of our expectations and Net
Debt anticipated to be significantly lower than 2019 level
-- Continued progress with respect to electrification strategy,
with additional new battery electric vehicle ("BEV") business wins
and the production launch of multiple Hyundai, Kia and Genesis
BEV's
-- The Group has repaid all COVID-19 related UK furlough
payments it received and has retroactively reinstated pay levels
for all employees who participated in temporary pay reductions in
2020
-- The Board has declared and approved an interim dividend of
6.74 Euro cents per share, to be paid in February 2021 based on the
Group's financial position and prospects and intends to return to
its stated annual dividend policy and normal dividend payment
cadence for the 2021 financial year
-- Continued confidence in the Group's ability to outperform
global light vehicle production on a constant currency basis,
maintain high margins and generate strong cash flow in 2021
-- Capital Markets Event on 13 April 2021
Group Results
We are pleased to announce that we anticipate the Group's
results for the year ended 31 December 2020, to reflect strong
operational performance and the confidence we outlined in our Q3
2020 Trading Update issued on 5 November 2020.
The Group is expected to report revenue of approximately EUR2.8
billion for the year ended 31 December 2020. On a constant currency
basis, we expect our 2020 revenue performance to be in line with
the decline in global light vehicle production*.
Despite the extremely challenging environment, the Group's
operating flexibility and extensive cost reduction and cash
preservation activities initiated early in the year are expected to
deliver a full year 2020 Adjusted EBIT margin % slightly better
than the mid-single digit range. Cash Flow generation remained
strong in Q4 2020 and the Group expects to deliver full year
Adjusted Free Cash flow well ahead of our expectations, with
year-end net debt to be EUR0.6bn, significantly lower than 2019
level of EUR0.74bn and lower than guidance provided at the time of
the Q3 2020 Trading Update.
* Source: IHS Markit January 2020 and Company estimates
Electrification Strategy Progress
The Group continued to see positive momentum through the
successful execution of our organic growth strategy and focus on
electric vehicles. Further to the wins announced in November 2020,
we are now in volume production of a range of products for thermal
fluid management on Volkswagen's ID.3 and ID.4 BEVs. In addition to
supplying Volkswagen various thermal coolant assemblies, the Group
is also proud to be the sole supplier of the cabin comfort CO(2)
heat pump valve unit assembly on this BEV platform, an exciting new
technology which delivers increased operating efficiency and
supports extended electric vehicle driving range over that of a
traditional refrigeration based cabin comfort system. We look
forward to the success of these vehicles and our growing content in
this important strategic BEV segment.
We are also pleased to announce that the Group has recently
launched into production thermal coolant fluid carrying loops for a
large family of Hyundai, Kia and Genesis battery electric vehicles,
starting with the NE EV, a new compact crossover BEV based on the
Hyundai's futuristic "45" concept vehicle.
These coolant fluid carrying systems will be supplied across
eight different Hyundai BEV platforms, all produced in South Korea.
The new fluid carrying products apply our innovative approach for
light weight and optimized engineered polymer lines with quick
connectors that are formed and assembled in various diameter sizes
for the battery and motor drive thermal management systems.
The Group also continues to win new business awards for BEV
programs with a wide range of global and regional OEMs across all
three major light vehicle production regions.
These successful launches and business wins continue to
demonstrate our ability to meet the fluid handling and thermal
management needs of all propulsion modes including
electrification.
Dividend Update
In light of the exceptional performance during the closing
months of 2020, the Group is pleased to announce that during Q4
2020 it repaid any previously received UK furlough payments
received from the UK government and has retroactively reinstated
pay levels for all employees who took part in pay and salary
reductions during 2020. We wish to thank our entire global
organization for their shared sacrifice, commitment, excellent
performance and support through one of the most severe market
declines this industry has historically faced.
In the Q3 Trading Update the Board stated the intention to
declare an interim dividend in Q1 2021 reflecting the strong
operating and financial performance of the Group over the past
several years, together with its increasing confidence in the
outlook for the business.
The Company is pleased to announce today that the Board has
approved and declared an interim dividend of 6.74 Euro cents per
share, amounting to EUR35.0 million based on the overall strength
of the Group's financial position and prospects. The interim
dividend will be converted to Sterling at a fixed rate on 5
February 2021 (the "Dividend Record Date") and will be paid on 19
February 2021, to shareholders on the register at the Dividend
Record Date.
The Group is committed to its stated annual dividend policy (30%
Adjusted Net Income) paid on an interim and final basis for each
financial year. However, in light of the significant amount of the
interim dividend now being declared and the anticipation that,
despite exceptional operating and financial performance during
2020, Adjusted Net Income for the 2020 financial year will be
relatively low, the Board has decided that it would not be
practical to propose a nominal final year 2020 dividend under the
dividend policy. The Company expects to return to its stated annual
dividend policy and normal dividend payment cadence for the 2021
financial year. The Board continues to believe that dividends
represent an important part of the Group's shareholder value
proposition and that the Company's dividend policy is both
affordable and sustainable within its wider capital allocation
framework .
Outlook
We have entered 2021 with solid momentum and are encouraged by
the sequential recovery in our markets through the second half of
2020. Whilst the COVID-19 pandemic continues to create areas of
uncertainty, we remain confident in the Group's ability to
outperform global light vehicle production on a constant currency
basis, maintain high margins and generate strong cash flow. We
expect to provide our 2021 outlook with our full year 2020
results.
The resilient performance through the extremely challenging
conditions faced in 2020 have reinforced the strength of the
Group's business model, cost flexibility, solid cash generation
capability and experienced management team. 2020 also saw the Group
make significant progress in executing on a successful transition
to electrification, with strong momentum in its BEV thermal product
and system content wins and launches.
Capital Markets Event
TI Fluid Systems plc plans to hold a virtual Capital Markets
Event on 13 April 2021.
The virtual event will be hosted by Bill Kozyra, CEO and Ronald
Hundzinski, CFO, and will include product demonstrations as well as
presentations from our Executive Vice Presidents of our two
segments, Fluid Carrying Systems ("FCS") and Fuel Tank and Delivery
Systems ("FTDS").
Enquiries
TI Fluid Systems plc
David J Royce
Investor Relations
Tel: +1-248-376-8624
FTI Consulting
Richard Mountain
Nick Hasell
Tel: +44 (0) 20 3727 1340
Cautionary Statement
This announcement is based on unaudited provisional results for
the year ended 31 December 2020. This announcement also contains
certain forward-looking statements with respect to the financial
condition, results of operations and business of TI Fluid Systems
plc (the "Company"). The words "believe", "expect", "anticipate",
"intend", "estimate", "forecast", "project", "will", "may",
"should" and similar expressions identify forward-looking
statements. Others can be identified from the context in which they
are made. By their nature, forward-looking statements involve risks
and uncertainties, and such forward-looking statements are made
only as of the date of this announcement. Accordingly, no assurance
can be given that the forward-looking statements will prove to be
accurate and you are cautioned not to place undue reliance on
forward-looking statements due to the inherent uncertainty therein.
Past performance of the Company cannot be relied on as a guide to
future performance. Nothing in this announcement should be
construed as a profit forecast.
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