April 19, 2024

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ElringKlinger focuses on e-mobility growth and sustainability by Investing.com

ElringKlinger focuses on e-mobility growth and sustainability by Investing.com

The ElringKlinger Group (ZIL2), a major player in the automotive industry, has taken important steps in its transition towards electric mobility and sustainability, as detailed at its conference with analysts held in Frankfurt. Thomas Gesolat, CEO, highlighted the company's strong order book for electric mobility applications, amounting to more than 4 billion euros, and the significant increase in revenues for non-internal combustion engines, which will reach 214.2 million euros in 2023.

The Group also recorded a significant increase in its revenues in the after-sales segment, from €182 million in 2020 to €300 million in 2023. Financially, ElringKlinger achieved an EBITDA of €200 million and an EBIT margin The depreciation (EBIT) rate is 200 million euros. 5.4% in 2023. The company is optimistic about its future, aiming for more than 50% of its revenue to come from electric mobility and non-automotive applications by 2030.

Main aspects

  • The ElringKlinger Group has received significant orders from BMW Group and electrolysis products, with more than €4 billion in e-mobility orders.
  • The company aims for non-e-mobility revenues to constitute more than 50% of its total revenues by 2030.
  • Aftermarket revenues rose to 300 million euros in 2023, compared to 182 million in 2020.
  • ElringKlinger reported EBITDA of €200 million and an EBIT margin of 5.4% for 2023.
  • Operating free cash flow rose significantly to €37 million, and net debt decreased by 11.3% to €323 million.
  • The company plans to focus on e-mobility applications and expects slight growth in 2024.

Company expectations

  • ElringKlinger expects slight growth in 2024 focused on e-mobility.
  • Medium-term goals include an EBIT margin of 7% and improved operating free cash flow.
  • The company expects steady market development in its main markets, with slight growth in Greater China.
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Highlighted bearishness

  • The company is in a transition phase away from ICE products, and current e-mobility revenues are negative due to significant investments.
  • Inflationary pressures on labor costs are expected in 2024.
  • Service work related to ICE engine testing was closed, which affected the development of the fourth quarter.

Highlights of the climb

  • ElringKlinger has refined its purpose, vision and mission to focus on innovative technologies for a sustainable future.
  • The company has received funding from IPCEI worth up to €177 million to develop fuel cells.
  • It plans to expand its battery technology competence center in Neufen.

misses

  • Despite the overall positive outlook, the company has recognized weaker margin development potential.

questions and answers

  • Thomas Jesolat, CEO, responded to questions regarding fourth-quarter profitability, particularly in the engineering plastics and aftermarket segment, highlighting the good performance of the aftermarket.
  • EKPO's profitability is enhanced by IPCEI financing and capitalized engineering expenditures.
  • Jesolat stressed that there will be no significant increase in the capitalization ratio in 2024.

This earnings report demonstrates the ElringKlinger Group's commitment to changing its business model towards more sustainable and future-oriented technologies. With a strong order book and strategic investments in e-mobility, the company is well positioned to capitalize on growing demand for non-ICE applications and aims to maintain strong financial results in the coming years.

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