DELFINGEN INDUSTRY: 2022 annual results – 03/31/2023 at 17:40

2022 annual results

• Turnover of €417.1 million, up +15%

• Significant improvement in results in H2 2022 (vs. H2 2021)

• Proposed dividend of €0.64/share

Outlook 2023

• Reaffirmation of the revenue target of €450 million

• Current operating margin target of 6%

Delfingen (Euronext Paris, ISIN code: FR0000054132), global automotive supplier, leader in on-board network protection solutions and tubes for fluid transfer,

publishes its 2022 annual results, marked by a marked improvement recorded in the second half.

Gérald Streit, Chairman and CEO of Delfingen declares on this occasion:

“Delfingen is posting a year of strong growth in 2022 despite a difficult context, thanks to solid fundamentals, a resilient model and a leading position in an automotive industry which is at the heart of the new challenges of electrification, connectivity , safety and environmental requirements. I would like to thank the Delfingen teams who mobilize on a daily basis to provide all of our customers around the world with ever more innovative solutions with high added value. Backed by our operational excellence, we are pursuing our mission by seizing all the growth opportunities offered by our changing markets, with the ambition of being a player in cleaner and more responsible mobility”.

Excellent business performance in 2022 marked by an acceleration in the second half

In the first half, despite a difficult context linked to tensions over electronic components, the Russian-Ukrainian crisis and health restrictions in China, Delfingen recorded growth of +5.3% (+3.2% at scope and rate). constant exchange rate).

From the third quarter, and thanks to a stabilization of the market environment, Delfingen accelerated its trajectory to post growth of +26% in the second half. This favorable shift enabled it in November to revise upwards its revenue forecast for 2022 from more than €380 million to €410-415 million.

Overall, in 2022, Delfingen recorded revenue of €417.1 million, up 15% (+11% at constant scope and exchange rates), exceeding the upper range of its revised target. Over the year, Delfingen benefited from the growth of its 2 Mobility and Industrial segments in all of its regions. Growth in the Mobility segment was in particular twice that of global automotive production, driven by solid performances in the Americas and Asia, and confirming its global leadership position.

Significant improvement in results in H2 2022 compared to H2 2021

The operating performance for the year was penalized by the rise in production costs (energy, transport, raw materials, labour).

Despite this increase, the Group maintained a solid gross margin during the year, rising from 47.1% in the first half to 46.1% of sales in the second half. Overall, the gross margin in 2022 was €194.5 million, i.e. 46.6% of revenue, down 4 points compared to 2021.

Current operating income increased by +102% between the second half of 2021 and 2022, while it posted a -42% drop between the first half of 2021 and 2022. This performance allows Delfingen to post on the 2022 current operating income down 13%, to €21.1 million. The current operating margin rate thus stands at 5% in 2022, in accordance with the expectations that Delfingen had set.

After accounting for non-recurring costs of €3.3 million, including €2.7 million following the sale of the site in Russia, and €0.6 million related to the closure of the Valahia site, operating profit established at €17.7 million, down 27%.

After a decrease of 74% in the first half, the net income group share is back on the path to growth in the second half with an increase of 46% over the period. Overall over the year, once financial charges have been taken into account, which increased by 24% to €3.6 million and a tax charge of €5.9 million, net profit attributable to the group amounts to 8.1 M€ compared to 16.1 M€ in 2021.

Financial structure

The balance sheet shows a total of €352.8 million as of December 31, 2022, up 7% compared to 2021, and shareholders’ equity group share of €145 million, up 5%.

Net financial debt amounted to €128.3 million at December 31, 2022 (€103.9 million at the end of 2021), including €31.0 million related to IFRS 16 debt. Investments amounted to €18.5 M€, the working capital requirement increased by 27.5 M€ under the combined effect of higher activity in the second half and the increase in the value of raw materials in stock. Debt leverage is increasing with a gearing (net debt/equity) of 88% (75% at the end of 2021, and a leverage ratio (net debt/EBITDA) of 3.2 (2.3 at the end of 2021).

The increase in gearing and leverage ratio is due to the combined effects of:

• the decline in profitability (-11% vs 2021);

• the increase in WCR (+28% vs 2021);

• the continuity of investment efforts (+28% vs 2021).

The leverage ratio covenant was negotiated with financial partner Tikehau when the bond was refinanced during the year and is now set at 3.5.

Proposed dividend of €0.64 per share

Delfingen’s Board of Directors will propose to the General Meeting of June 2, 2023 the payment of a dividend of €0.64 per share for the 2022 financial year, demonstrating management’s confidence in the Group’s prospects.

Outlook for 2023: objective of revenue of €450 million and a current operating margin of 6%

According to the S&P Global Mobility study of January 2023, global automobile production should amount to 85.1 million vehicles in 2023, up 3%. This growth should remain largely driven by the American market, while the Asian market is expected to be stable and Europe should recover.

In this market offering solid prospects, Delfingen is confident in its ability to continue to outperform its markets and is targeting sales of €450 million in 2023, representing annual organic growth of nearly 8%. Over this horizon, Delfingen intends to improve its operating margin to reach 6% in 2023 (compared to 5% in 2022).

To achieve these objectives, Delfingen has set itself 3 strategic priorities in 2023:

• Strengthen its “Protection of on-board electrical networks” activity
  

• Move from a position of n°3 to a position of n°2 worldwide in textile applications for mobility;

• Diversify in the “Industries” end market (robotization, automation, etc.);

• Strengthen its geographical positions in Korea, Japan and Germany.

• Strengthen its financial structure
  

• Improvement in current operating margin from 5% to 6%;

• Increase cash flow generation and reduce debt.

• Turning environmental and cyber “constraints” into opportunities
  

• By using the decarbonization plan as an operational and business lever;

• By capitalizing on its TISAX certification, the benchmark standard for the automotive industry, to strengthen collaboration with OEMs and Tier 1s.

About Delfingen ( www.delfingen.com )

Delfingen is an automotive supplier, world leader in on-board network protection solutions and tubes for fluid transfer, in the mobility and industrial markets.

A family business with more than 70 years of history, the Group has 3,800 employees and shines throughout the world, as close as possible to its customers, with its 38 locations in 21 countries on 4 continents: Americas, Europe, Africa and Asia.

Delfingen is at the heart of the new mobility challenges of today and tomorrow: electrification, connectivity, autonomous driving, safety and environmental requirements.

Delfingen is listed on the Euronext Growth Paris market (FR0000054132 – ALDEL) and is a member of the MiddleNext association.

Safe Harbor Statement

Although DELFINGEN’s management considers these forward-looking statements to be reasonable as of the date of publication of this document, investors are warned that these forward-looking statements are subject to numerous elements, risks and uncertainties, which are difficult to predict and generally outside the scope of control of DELFINGEN, which may imply that the results and events actually achieved differ significantly from those expressed or forecast

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