TI Fluid Systems points to sales slowdown in 2024

Shares in TI Fluid Systems dipped on Tuesday despite a largely in-line set of full-year results, as it pointed to slowdown in revenue growth in 2024.

The company, which provides automotive fluid storage, carrying and delivery systems and thermal management products and systems, reported a 11.1% increase in constant-currency revenues to €3.52bn, helped by a recovery in industry volumes, inflationary cost recoveries and the launch of new products.

Revenue growth was strongest in Europe and Africa, and North America, with constant currency growth rates of 14.2% and 14.3% respectively, while in Asia Pacific, constant currency revenue growth was 4.5%, held back by weakness in China.

Adjusted earnings before interest and tax (EBIT) surged 44.2% to €259.6m, helped by a 190 basis-point improvement in the adjusted EBIT margin to 7.4%, which chief executive Hans Dieltjens said was a result of "unrelenting operational and commercial execution".

Adjusted free cash flow was up nearly 80% at €140.7m, while shareholders received a 169% increase in the full-year dividend per share to 6.83 cents.

However, looking ahead, while the TI Fluid Systems held on to its revenue guidance of generating €3.8-4.2bn by 2026 and returning to a double-digit adjusted EBIT margin in the "mid-term", it pointed to "flat to low-single digit constant currency revenue growth" in 2024.

"Our 2024 planning assumptions are based on a modest year-on-year industry volume decline. Automotive production volumes for 2024 are forecast to be slightly higher in North America, flat in China and slightly negative in Europe," the company said,.

The stock was down nearly 2% at 152.8p by 0921 GMT.