EQS-Adhoc: ElringKlinger AG: Annual earnings impacted by substantial non-cash impairment losses – Strong operating free cash flow and further reduction in debt

ADHOC ANNOUNCEMENT

Annual earnings impacted by substantial non-cash impairment losses – Strong operating free cash flow and further reduction in debt

• Preliminary, unaudited results for 2024: revenue at EUR 1,803 million (2023: EUR 1,847 million), organic revenue at EUR 1,831 million; adjusted EBIT margin at 4.8% (2023: 5.4%); operating free cash flow at EUR 58.5 million (2023: EUR 36.7 million); net financial liabilities at a thirteen-year low of EUR 250 million (2023: EUR 323 million).
• Strategic reorientation: focus on profitable business and discontinuation of loss-making activities. Management Board anticipates that this will unlock annual earnings potential of around EUR 10 million as from 2026.
• 2024 financial year severely impacted by non-recurring, non-cash impairment losses of EUR 238 million.

ElringKlinger AG (ISIN DE0007856023 / WKN 785602) generated revenue of EUR 1,803 million (2023: EUR 1,847 million) in the 2024 financial year, based on preliminary and unaudited financial data. Assuming stable exchange rates, revenue amounted to EUR 1,831 million. EBITDA totaled EUR 144 million (2023: EUR 200 million), while adjusted EBIT amounted to EUR 86.2 million (2023: EUR 100 million), which corresponds to an adjusted EBIT margin of 4.8% (2023: 5.4%). The Group thus met its October 2024 targets of generating organic revenue slightly short of the previous year's level and posting an adjusted EBIT margin of around 5%. The Group had expected operating free cash flow to be just within positive territory but instead managed to exceed the target significantly at EUR 58.5 million (2023: EUR 36.7 million). As a result, it was in a position to scale back net financial liabilities substantially to a thirteen-year low of EUR 250 million (2023: EUR 323 million). Consequently, the net debt-to-EBITDA ratio stood at 1.7 (Dec. 31, 2023: 1.6).

The Management Board has adopted a strategic package of measures for the purpose of ensuring that ElringKlinger can maintain a resilient position amid challenging economic and political conditions. In this context, ElringKlinger is discontinuing its systems business for electric drive units and will focus on its profitable components business. Therefore, the Management Board has resolved to examine strategic options relating to its investment in hofer AG. In total, impairment losses recognized in respect of new drive technologies amount to EUR 85 million. In addition, the Group is reviewing its other shareholdings and will take further steps if necessary.

As of December 31, 2024, the Group effected the closing, i.e., the legal completion, of the sale of the two entities in Switzerland and the United States, for which an agreement had been signed in October. This transaction resulted in charges recognized in profit or loss with a total net effect of EUR 103 million, of which impairment losses of EUR 58 million had already been recognized in the preceding financial statements for the third quarter of 2024.

Against the backdrop of the challenges faced by the global automotive industry, ElringKlinger is cutting the number of its sites and plans to discontinue operations not only at its plant in Thale, Germany, but also at its US site in Fremont, CA. In total, the Group recognized impairment losses of EUR 50 million relating to assets and restructuring expenses for these and further individual sites.

In total, non-cash impairment losses stood at EUR 238 million as of the end of the 2024 reporting period. Based on these strategic measures, the Management Board expects to unlock earnings potential of around EUR 10 million per year from 2026, of which around EUR 7 million should materialize as early as 2025. ElringKlinger plans to publish its audited results and detailed information on its outlook for 2025 as part of its annual report on March 27, 2025.

About ElringKlinger  

As an independent supplier operating worldwide, the ElringKlinger Group has established itself as a powerful and trusted partner to the automotive industry – acknowledged for its exceptional depth of expertise. Our product portfolio encompasses innovative solutions for passenger cars and commercial vehicles powered by electric motors, hybrid technology, or combustion engines. Alongside the powertrain, other areas of application include the underbody, chassis, braking system, interior, and vehicle body. We were among the frontrunners when it came to positioning ourselves as a specialist in the field of e-mobility – with pioneering battery and fuel cell technology, and associated components and assemblies, such as plastic housings, and punched and formed metal parts.

Customized lightweight components engineered by ElringKlinger can be used throughout the entire vehicle; they deliver tangible benefits in terms of weight reduction, efficiency, and functional integration, especially in e-mobility applications.

Additionally, we serve the aftermarket in more than 140 countries with an extensive range of spare parts.

These efforts are supported by a dedicated workforce of more than 9,000 people employed within the ElringKlinger Group. Operating at more than 40 sites worldwide, ElringKlinger has established a global presence and is closely aligned with its customers in all major automotive regions.

Legal notice

This release contains forward-looking statements. These statements are based on the expectations, market assessments, and forecasts of the Management Board and the information currently available to it. These forward-looking statements shall, in particular, not be construed as guarantees of future developments and results referred to therein. Although the Management Board is of the firm opinion that the statements made and their underlying beliefs and expectations are realistic, they are based on assumptions that may prove to be incorrect. Future results and developments depend on a variety of factors, risks, and uncertainties that may lead to changes in the expectations and judgments that have been expressed. These factors include, for example, changes in general economic and business conditions, fluctuations in exchange rates and interest rates, lack of acceptance of new products and services, and changes in business strategy.