TI Fluid Systems reports 'strong' results as EV market expands

The FTSE 250 company reported adjusted EBIT of €373.5m for the year ended 31 December, down 0.2% at constant currency, with a margin of 10.8%, which was also 0.2 percentage points lower than the prior year.

Profit for the year reportedly grew by €24.9m, or 27.1% at constant currency, to €140.1m.

TI Fluid Systems said its adjusted net income grew by €19.2m, or 14.1%, to €155.2m, with adjusted basic earnings per share standing at 29.9 euro cents.

It said its adjusted free cash flow totalled €146.2m for the year, up 23.3%, and proposed a final dividend of 5.94 cents per share, making for a total dividend of 8.96 cents for the full year.

During the year, it refinanced its borrowing facilities, repaying the 8.75% senior unsecured notes using cash and an additional term loan, reducing its interest expense by around €10m per year.

On the operational front, TI Fluid Systems said it successfully executed its hybrid electric vehicle (HEV) and electric vehicle (EV) strategy during the period, creating organic growth opportunities.

It said it saw “significant” EV awards, and expected additional orders for the design, engineering and supply of thermal products with two leading high-volume European original equipment manufacturers (OEMs).

Current lifetime revenue opportunity stood at approximately €700m based on customer planning volumes, the board said, adding that it had made strategic progress in advancing its share position of the HEV pressurised fuel tank market, while continuing to win thermal awards on available key EV platforms with Korean and Chinese OEMs.

“2018 was a great year for TI Fluid Systems,” said president and chief executive officer William Kozyra.

“Despite a slight softening in global light vehicle production growth, we achieved strong organic growth, solid profit margins and free cash flow generation.

The excellent progress delivered in executing our HEV and EV strategy in 2018, as well as our approach of continued and disciplined organic growth has positioned the group well for 2019 and beyond.”

Kozyra said the company was continuing to work on new design and engineering thermal management and pressurised tank opportunities with its existing customers, as the electric market continued to progress.

“We are confident that our business model will continue to deliver consistent, strong financial performance along with attractive returns.”