TI Fluid Systems 'resilient' after revenues fall in 2020

The FTSE 250 firm swung to an operating loss of €176.3m on a reported basis, from profit of €258.9m in the prior year, as its margin came in at a negative 6.3%, compared to a positive 7.6% in 2019.

Its adjusted net loss for the year was €252.2m, compared to a profit of €144.6m a year earlier, while losses per share totalled 48.88 euro cents, falling from earnings of 27/24 cents in the prior year.

The board declared a higher dividend, however, of 6.74 euro cents, rising from 3.02 cents at the end of 2019.

That was on the back of its performance for the company on a management basis, which did not take IFRS into account, under which the company managed to keep its head above water during the year.

It maintained an operating profit on a management basis of €171.3m, down from €340.4m, while earnings per share were 2.64 cents, sliding from 28.91 cents.

TI Fluid Systems’ adjusted free cash flow on the same basis was down €32m year-on-year, at €148.2m.

The company said the results reflected continued delivery of its model, with its revenue performance “broadly in line” with global light vehicle production.

It said it had a “strong” balance sheet and liquidity, with a cash position of €485.8m as at 31 December.

During the year it refinanced its term loan and revolving credit facilities, extending the term to 2024 from 2022.

A structural fixed cost reduction programme also began in the period to “enhance” its long-term returns profile, as a result of a “rebasing” of the global light vehicle production forecasts to lower levels in the short-to-medium term.

The board said a non-cash charge of €304.6m impacting goodwill, intangibles and fixed assets, primarily relating to the 2015 Bain purchase of TI Automotive, resulted in its reported loss.

“2020 saw the impacts of an unprecedented global economic downturn resulting from the widening of the Covid-19 pandemic,” said chief executive officer William Kozyra.

“The Group acted quickly, beginning in early March, to implement safeguards to protect the health of our employees together with cost savings and cash preservation measures to protect the viability of our business.

“Our actions were executed quickly and encompassed every aspect of our business.”

Kozyra said the company delivered revenue “broadly in line” with global light vehicle production, as well as positive margins and strong free cash flow generation despite the significant headwinds.

“Our balance sheet, liquidity and cash positions remain strong.

“These actions and initiatives were significant and will continue to assist the group's financial performance beyond 2020.

“We remain confident in our strategy, business model resilience, operating flexibility and strength in our ability to generate positive profit and positive free cash flow in 2021.”

At 0915 GMT, shares in TI Fluid Systems were up 2.19% at 299.2p.