EQS-News: ElringKlinger concludes 2024 financial year on a solid footing and specifies further transformation of the Group

PRESS RELEASE

 

ElringKlinger concludes 2024 financial year on a solid footing and specifies further transformation of the Group

• Preliminary, unaudited results for 2024:
  • Revenue at EUR 1,803 million (2023: EUR 1,847 million), organic revenue at EUR 1,831 million, adjusted EBIT margin at 4.8% (2023: 5.4%)
  • Strong operating free cash flow of EUR 58.5 million (2023: EUR 36.7 million)
  • Net financial liabilities at a thirteen-year low of EUR 250 million (2023: EUR 323 million)

• Strategic reorientation: focus on profitable business and discontinuation of loss-making activities. Management Board anticipates that this will unlock annual earnings potential of around EUR 10 million as from 2026.
• 2024 financial year severely impacted by non-recurring, non-cash impairment losses of EUR 238 million.
• CEO Thomas Jessulat: “In taking these measures, we are honing ElringKlinger’s profile in an effort to fortify the Group for further transformation amid challenging conditions. Our aim is to enhance the Group's profitability and improve cash flow for the long term."

ElringKlinger AG (ISIN DE0007856023 / WKN 785602) has published its preliminary and unaudited results for the 2024 financial year. On this basis, the Group generated revenue of EUR 1,803 million in 2024 (2023: EUR 1,847 million). Assuming stable exchange rates, revenue amounted to EUR 1,831 million. EBITDA totaled EUR 144 million (2023: EUR 200 million), while adjusted EBIT amounted to EUR 86.2 million (2023: EUR 100 million), which corresponds to an adjusted EBIT margin of 4.8% (2023: 5.4%). The Group thus met its October 2024 guidance of generating organic revenue slightly short of the previous year's level and posting an adjusted EBIT margin of around 5%. The Group had expected operating free cash flow to be just within positive territory but instead managed to exceed the target significantly at EUR 58.5 million (2023: EUR 36.7 million). As a result, it was in a position to scale back net financial liabilities substantially to EUR 250 million (2023: EUR 323 million). Consequently, its net debt-to-EBITDA ratio stood at 1.7 (Dec. 31, 2023: 1.6). After adjusting EBITDA for non-recurring items, primarily relating to the divestment of the two entities in the United States and Switzerland, the net debt-to-EBITDA ratio was 1.3 (Dec. 31, 2023: 1.5).

Commenting on the preliminary results, Thomas Jessulat, CEO of the ElringKlinger Group, said, “In this difficult environment, the Group posted financial results that were solid on the whole. Despite substantial investments in future-facing areas, we achieved strong operating free cash flow and were in a position to scale back net financial liabilities to their lowest level in thirteen years. By reducing debt, we have bolstered ElringKlinger's financing structure and established a solid foundation for the Group's ongoing transformation. Despite this, the underlying conditions are challenging and call for a clear, determined approach."

Strategic reorientation with a focus on profitable business

The Management Board has adopted a strategic package of measures for the purpose of ensuring that ElringKlinger can maintain a resilient position within a challenging economic and political climate, thus driving forward the Group's progressive transformation. A case in point is the discontinuation of the Group's system business for electric drive units. In future, the focus with regard to electric drive units will be on the profitable components business. Therefore, the Management Board has resolved to examine strategic options relating to its investment in hofer AG. In total, impairment losses recognized in respect of new drive technologies amount to EUR 85 million. In addition, the Group is reviewing its other shareholdings and will take further steps if necessary.

Sale of two plants completed

As of December 31, 2024, the Group effected the closing, i.e., the legal completion, of the sale of the two entities in Switzerland and the United States, for which an agreement had been signed in October. This divestment took place against the backdrop of the substantial investments required for the competitive continuation of business, which in turn would have restricted the Group in pursuing its chosen path of transformation. This transaction resulted in charges recognized in profit or loss with a total net effect of EUR 103 million, of which impairment losses of EUR 58 million had already been recognized in the preceding financial statements for the third quarter of 2024.

Reduction in the number of sites

Against the backdrop of the challenges faced by the global automotive industry, ElringKlinger is cutting the number of its sites and plans to discontinue operations not only at its plant in Thale, Germany, but also at its US site in Fremont, CA. Both plants are due to leave the Group in the middle of the year. In total, the Group recognized impairment losses of EUR 50 million relating to assets and restructuring expenses for these and further individual sites.

Annual earnings potential of around EUR 10 million from 2026

In total, non-cash impairment losses of EUR 238 million were recognized as part of the package as of the end of the 2024 reporting period. Based on these strategic measures, the Management Board expects to unlock earnings potential of around EUR 10 million per year from 2026, of which around EUR 7 million should materialize as early as 2025. ElringKlinger plans to publish audited figures and detailed information on its outlook for 2025 as part of its annual report on March 27, 2025.

Asked to comment, CEO Thomas Jessulat said, "By taking these steps in line with our SHAPE30 transformation strategy, we are looking to further hone ElringKlinger's profile. Our aim is to enhance the Group's profitability and improve cash flow for the long term. To this end, we are concentrating our product portfolio and deploying our resources in a targeted manner to achieve growth in our chosen fields of the future. Our substantial backlog of nominations, with the ramp-up of high-volume series production orders, forms the basis for this."

Further ramp-up for e-mobility applications

The continued ramp-up of large-scale production projects is an important cornerstone of ElringKlinger's transformation. Based on a strong portfolio of nominations in the billion euro range, revenue in the OE segment is expected to grow further, particularly for e-mobility applications. The E-Mobility business unit is scheduled to break even in 2027. In the 2024 financial year, revenue generated by this business unit more than doubled to EUR 103 million (2023: EUR 48.3 million). Alongside the current large-scale series production order relating to a global battery manufacturer, a high-volume order for cell contact systems for the BMW Group's New Class is also due to ramp up in the current year.

 

Preliminary, unaudited figures for FY2024 and Q4 2024

in mEUR	FY 2024	FY 2023	D abs.	D rel.	Q4 2024	Q4 2023	D abs.	D rel.
Revenue	1,802.9	1,847.1	-44.2	-2.4%	451.8	439.0	+12.8	+2.9%
of which currency			-28.1	-1.5%			-7.2	-1.6%
of which M&A			+0.0	+0.0%			+0.0	+0.0%
of which organic			-16.1	-0.9%			+20.0	+4.6%
EBITDA	144.4	200.3	-55.9	-27.9%	-7.3	52.3	-59.6	->100%
EBITDA adjusted	197.9	213.5	-15.6	-7.3%	45.6	57.4	-11.8	-20.6%
EBIT adjusted	86.2	100.1	-13.9	-13.9%	16.7	26.3	-9.6	-36.5%
Adjusted EBIT margin (in %)	4.8	5.4	-0.6 PP	-	3.7	6.0	-2.3 PP	-
Operating free cash flow	58.5	36.7	+21.8	+59.4%	82.9	41.6	+41.3	+99.3%
Net financial debt	250.5	323.2	-72.7	-29.1%
Net financial debt/EBITDA	1.7	1.6	+0.1	+6.3%
Net financial debt/EBITDA adj.	1.3	1.5	-0.2	-13.3%

About ElringKlinger  

As an independent supplier operating worldwide, the ElringKlinger Group has established itself as a powerful and trusted partner to the automotive industry – acknowledged for its exceptional depth of expertise. Our product portfolio encompasses innovative solutions for passenger cars and commercial vehicles powered by electric motors, hybrid technology, or combustion engines. Alongside the powertrain, other areas of application include the underbody, chassis, braking system, interior, and vehicle body. We were among the frontrunners when it came to positioning ourselves as a specialist in the field of e-mobility – with pioneering battery and fuel cell technology, and associated components and assemblies, such as plastic housings, and punched and formed metal parts.

Customized lightweight components engineered by ElringKlinger can be used throughout the entire vehicle; they deliver tangible benefits in terms of weight reduction, efficiency, and functional integration, especially in e-mobility applications.

Additionally, we serve the aftermarket in more than 140 countries with an extensive range of spare parts.

These efforts are supported by a dedicated workforce of more than 9,000 people employed within the ElringKlinger Group. Operating at more than 40 sites worldwide, ElringKlinger has established a global presence and is closely aligned with its customers in all major automotive regions.

 

Legal notice

This release contains forward-looking statements. These statements are based on the expectations, market assessments, and forecasts of the Management Board and the information currently available to it. These forward-looking statements shall, in particular, not be construed as guarantees of future developments and results referred to therein. Although the Management Board is of the firm opinion that the statements made and their underlying beliefs and expectations are realistic, they are based on assumptions that may prove to be incorrect. Future results and developments depend on a variety of factors, risks, and uncertainties that may lead to changes in the expectations and judgments that have been expressed. These factors include, for example, changes in general economic and business conditions, fluctuations in exchange rates and interest rates, lack of acceptance of new products and services, and changes in business strategy.

Contact:
For further information, please contact:

ElringKlinger AG
Dr. Jens Winter
Strategic Communications
Max-Eyth-Straße 2
72581 Dettingen/Erms
Germany
Phone: +49 7123 724-88335
E-mail: jens.winter@elringklinger.com