Autoneum increased its revenue in local currencies by 8.5% in 2022. In Swiss francs, revenue increased by 6.1% to CHF 1 804.5 million year-on-year, mainly due to inflation-related compensation. Despite challenges due to inflation and ongoing stop-and-go production, Autoneum succeeded in achieving an EBIT margin of 2.0% and a positive net result of CHF 10.9 million. In view of the low net result, the Board of Directors proposes to waive a dividend for the financial year 2022. Based on a closing of the Borgers acquisition by the end of March, Autoneum expects revenue of CHF 2.4 to 2.5 billion and an EBIT margin of 3.5 to 4.5% as well as free cash flow in the higher double-digit million range for 2023.
2022 was the third challenging year in a row for the automotive supply industry and at the same time the most demanding. Sharp fluctuations in production volumes as a result of bottlenecks in vehicle manufacturer supply chains continued in 2022. They were worsened in Europe by the war in Ukraine, and in China, Autoneum’s most important Asian market, by coronavirus-related lockdowns. In addition, there was an increase in energy and raw material prices with a climbing inflation the likes of which we have not experienced in the last 40 years. Despite these difficult conditions, Autoneum managed to post a positive Group net result and generate a solid free cash flow of CHF 57.3 million. In view of the challenges, we consider this to be a success.
With the acquisition of the Borgers automotive business announced in January 2023, Autoneum has taken an important strategic step toward further expanding its global market and technology leadership with sustainable and lightweight acoustic and thermal management solutions for vehicles. The Borgers products and technologies will provide an ideal complement to Autoneum’s offerings. Autoneum’s global presence offers further revenue potential in the medium term for profitable growth with the Borgers product portfolio, which until now has mainly been focused on Europe. Thanks to renegotiated supply agreements with customers, the transaction shall have a positive impact on earnings per share from the start, despite the planned capital increase of approximately CHF 100 million.
Higher revenue thanks to inflation-related compensation
With 82.4 million vehicles produced (2021: 77.2 million vehicles) and an increase of 6.7%, the global automobile production recorded the first significant growth in two years, driven by the Asia and North America regions; however, production volumes remained below the level in 2019. Autoneum’s revenue in local currencies rose considerably by 8.5%, although this was mainly due to inflation-related price adjustments. In the Europe, Asia and North America regions, Autoneum’s production volumes developed below market level. Consolidated revenue in Swiss francs rose slightly less compared to the previous year due to the strength of the Swiss franc, increasing by 6.1% to CHF 1804.5 million (2021: CHF 1 700.4 million).
High inflation and lower production volumes impact net result
Autoneum has consistently negotiated with customers throughout the year in order to offset rising costs for raw materials, energy, transport and personnel as much as possible. These negotiations showed adequate results, especially in the second half of the year, but the full offsetting effect in the income statement will not materialize until 2023. There was also an unfavorable model mix effect: Growth in China, Autoneum’s main Asian market, and to some extent in Europe as well, was primarily driven by vehicle models that had parts supplied by Autoneum only to a limited degree. The lower production volumes at Autoneum resulted in much lower revenue in Asia and Europe, where margins are generally strong, and this was not offset by the very good results in the SAMEA region (South America, Middle East and Africa).
EBIT fell compared to the previous year by CHF 22.2 million to CHF 35.4 million (2021: CHF 57.5 million) and the EBIT margin declined from 3.4% to 2.0%, due in particular to lower EBIT contributions from Business Groups Europe and Asia. Net result declined by CHF 19.2 million to CHF 10.9 million (2021: CHF 30.1 million).
Free cash flow was CHF 57.3 million for the financial year, which was CHF 13.8 million below the previous year (2021: CHF 71.1 million). The main reasons for this were the lower net result and the higher investments in tangible assets, which rose compared with the previous year by CHF 5.5 million to CHF 39.7 million (2021: CHF 34.1 million).
Net debt (excluding lease liabilities) changed very little compared with the previous year and as of December 31, 2022 amounted to CHF 252.2 million (December 31, 2021: CHF 251.4 million).
The equity ratio also remained nearly unchanged, amounting to 29.4% at the reporting date (December 31, 2021: 30.0%), mainly because of currency losses recorded directly in equity, the reduced net result and dividend payments.
In local currencies, Business Group Europe’s revenue rose by 2.7%, while vehicle manufacturer production volumes shrank by 0.7%. Revenue in Swiss francs fell as a result of negative exchange rate effects, declining by CHF 20.3 million, or 3.2%, to CHF 616.6 million (2021: CHF 636.9 million). Revenue growth above market was the result of inflation compensation, while Business Group Europe’s production volumes were well below those of the previous year. The vehicle models predominantly supplied by Autoneum performed worse than the market average, which is why Autoneum lagged behind the market trend in this region. EBIT dropped by CHF 26.5 million to CHF 5.8 million (2021: CHF 32.2 million), with the EBIT margin decreasing from 5.1% to 0.9%. The main reasons for the decline were reduced production volumes, inflation and higher energy costs, which increased most sharply in Europe, and ongoing stop-and-go production by vehicle manufacturers a