The automobile industry recovered significantly in the first half of 2021 compared to the prior-year period, which had been impacted by the effects of the coronavirus pandemic. Autoneum benefited from the market dynamics and managed to increase its revenue in local currencies by 24.3% in the first semester. EBIT rose to CHF 44.7 million thanks to higher revenues and further progress in the turnaround in North America, corresponding to an EBIT margin of 5.0%. The strong free cash flow of CHF 67.2 million has allowed for a further reduction in net debt.
Strong revenue growth after pandemic-related decline in 2020
In the first half of 2021, 29.2% more light vehicles were produced worldwide than in the coronavirus-hit first half of 2020. The market recovery, though significant, was hampered by the global semiconductor shortage, which led to temporary production stoppages and manufacturers producing lower vehicle volumes. Autoneum increased revenue in local currencies by 24.3% in the first six months. In Swiss francs, revenue climbed by 21.9% to CHF 890.3 million. Business Group SAMEA (South America, Middle East and Africa) grew clearly above market, while the shortage of semiconductors in North America in particular impacted the production of models supplied by Autoneum and the revenue development of Business Group North America.
Significant increases in profitability and solid net profit
Autoneum managed to improve its operating result (EBIT) considerably by CHF 76.5 million in the first six months compared to the prior-year period. In addition to higher revenues, this was mainly due to the immediate and sustainable adjustment of the cost structure in all Business Groups to the new market reality in 2020 as well as the improved earnings achieved in the turnaround program in North America. Higher material costs, however, had a negative impact on the operating result. EBIT in the amount of CHF 44.7 million (prior-year period: CHF –31.8 million) corresponds to an EBIT margin of 5.0% (prior-year period: –4.4%). All Business Groups made significant improvements in EBIT for the reporting period. Net result totaled CHF 25.5 million (prior-year period: CHF –54.9 million), thus confirming the return to profitability achieved in the second half of 2020.
Further reduction in net debt
Free cash flow also developed positively in the first six months of the reporting year, increasing by CHF 81.1 million to CHF 67.2 million (prior-year period: CHF –13.9 million). This was driven by the substantial improvement in the Group’s net result. Thanks to this positive development, net debt was reduced further in the first half of 2021 and the equity ratio increased: Net debt, excluding lease liabilities, decreased by CHF 41.9 million to CHF 229.8 million (December 31, 2020: CHF 271.7 million) and the equity ratio grew by 6.5 percentage points to 29.3% (December 31, 2020: 22.9%). The continuous improvement in financial performance will enable Autoneum to repay the two subordinated loans in the amount of CHF 20.0 million each, granted in December 2019 by the anchor shareholders Michael Pieper and Peter Spuhler, at the end of July 2021.
With growth of 27.4% in local currencies, revenue of Business Group Europe was sharply up on the prior-year period, although revenue development in this region was also affected by lower production volumes due to the semiconductor shortage. In Swiss francs, revenue increased by CHF 81.6 million in the first half of 2021 to CHF 354.8 million (prior-year period: CHF 273.2 million). Driven by the strict adjustment of the cost structure in the prior year and higher revenues, EBIT improved by CHF 31.3 million to CHF 26.6 million (prior-year period: CHF –4.8 million). With an EBIT margin of 7.5% (prior-year period: –1.7%), Business Group Europe achieved a very good operating result in the first half of 2021. Earnings include positive one-off effects of CHF 4.8 million.
Business Group North America increased revenue in local currencies by 19.8%. Vehicle models of US customers predominantly supplied by Autoneum – passenger cars and smaller SUVs – were disproportionately affected by the semiconductor shortage, causing Autoneum to grow slower than the market in this region. In Swiss francs, revenue totaled CHF 356.0 million in the first half of 2021 (prior-year period: CHF 311.5 million). EBIT rose disproportionately to the growth in revenue by CHF 33.1 million to CHF –10.0 million, and the EBIT margin improved by 11.0 percentage points to –2.8%. Decisive factors in this increase in result were further improvements made under the turnaround program. The progress and implementation of measures are on track and are being driven forward continuously.
Higher production volumes of German and Japanese automobile manufacturers were the main reason for the improved revenue at Business Group Asia: In local currencies, revenue rose by 24.3% in the reporting period. Revenue in Swiss francs grew by CHF 28.3 million to CHF 134.1 million (prior-year period: CHF 105.8 million). Thanks to the investments made in the expansion of vertical integration, the EBIT margin was up from 4.5% in the first half of 2020 to 12.0%. EBIT increased accordingly by CHF 11.3 million to CHF 16.1 million (prior-year period: CHF 4.8 million).
Business Group SAMEA grew significantly above market in the first half of 2021. This growth was driven, once again, by high-volume programs in Turkey and South Africa. Inflation-adjusted revenue in local currencies climbed by 44.3%. Due to the continued strong depreciation of various currencies in the region, revenue consolidated in Swiss francs rose by only 17.3% to CHF 44.4 million (prior-year period: CHF 37.9 million). The high level of capacity utilization and consistent cost management resulted in an EBIT of CHF 6.4 million (prior-year period: CHF 1.9 million), which corresponds to an excellent EBIT margin of 14.5% and represents an increase of 9.6 percentage points (prior-year period: 5.0%).
10 years of Autoneum
In 2021, Autoneum celebrates its tenth anniversary as an independent company. Since becoming independent and going public in May 2011, Autoneum has successfully extended its position as the global market and technology leader in acoustic and thermal management for vehicles. This is particularly thanks to the dedication of its employees. The anniversary year is thus dedicated to the appreciation of the staff: To celebrate the past ten years of successful expansion, innovation and collaboration, all locations will hold anniversary celebrations and employee events – in compliance with measures to contain the coronavirus pandemic – in 2021.
Extension of innovation leadership
Autoneum continued to invest in sustainable mobility in the first half of 2021: Thanks to an alternative backcoating (ABC) process, in which a thermoplastic adhesive is used instead of latex, Autoneum’s needlepunch carpets are now even more recyclable. In addition, the innovative ABC process reduces energy consumption and CO2 emissions in manufacturing and, unlike the production of standard backcoatings, does not require any water at all. Autoneum’s latex-free needlepunch carpets are already in use today in various customer models, while the new, more sustainable generation of tufted carpets is scheduled to go into production in early 2022.
Vehicle manufacturers will in future benefit from Autoneum’s decades of experience in designing tailored sound packages thanks to a new partnership with the software company Free Field Technologies (FFT) in vehicle acoustic design. Autoneum’s validated methodology for the prediction and insulation of structure-borne noise will be incorporated into FFT’s market-leading simulation software for acoustics and vibroacoustics, thus making it the global standard in noise, vibration, harshness (NVH) engineering. Manufacturers therefore not only gain easier access to more accurate and production-based data, the precise prediction of vehicle performance early in the development process also allows them to significantly reduce design and lead times in addition to optimally balancing performance, weight and cost of noise-insulating materials.
The development of global light vehicle production in the second half of 2021 remains uncertain due to the semiconductor shortage. Although there is a high demand from end customers in all regions, it can be assumed that the shortage of chips will continue to impact automobile production in the second half of the year, but not as severely as in the second quarter of the first half-year.
Revenue in the second half-year 2021 is expected to be higher than in the first semester. Based on the unfavorable allocation of semiconductors to vehicle models supplied by Autoneum in the first half of 2021, revenue development is likely to be slightly below market for the full year 2021. With an easing of the semiconductor shortage, this will normalize.
Despite the impact of the semiconductor shortage and increases in raw material prices still expected in the second half of the year, the profitability target of an EBIT margin of 4–5% communicated in March remains unchanged. Free cash flow is now expected to reach a high (previously: “higher”) double-digit million amount in 2021.