Chip crisis and cost increases hit operating profit / No immediate improvement in sight
Sales losses due to the chip shortage in the automotive industry and heavy cost increases have slashed the operating result of Hella (Lippstadt / Germany; www.hella.com) in the first six months of the current 2021/22 business year (starts May 2021). The headlamp specialist’s adjusted EBIT plunged 42% to EUR 156m compared to the same period the previous year, after the company had gained a new majority shareholder with Faurecia (see Plasteurope.com of 24.11.2021) in 2021. Currency and portfolio-adjusted sales fell by 2.6% to EUR 3 bn.

“At present, there are great challenges in the market environment,” says CEO Rolf Breidenbach. “Due to the massive bottlenecks in the global supply and logistics chains, global vehicle production sustained a drastic collapse in the second fiscal quarter, in particular.” Reported quarterly EBIT, meanwhile, rose by more than half to EUR 149m, as the previous year’s figure had been depressed by restructuring costs. The net profit for the period, which, at EUR 103.6m, was similarly more than 50% above the like-for-like figure for the previous year, must also be viewed against this background.

In the company’s main business segment of Automotive, sales in the second quarter fell 4.9% to EUR 2.58 bn, while EBIT slumped 58% to EUR 92m. Alongside low sales volumes, rising material and logistics costs, and increased inefficiencies in production, Hella attributed the decline in earnings to higher research and development costs for new customer projects. At the same time, the significantly smaller Aftermarket and Special Applications segments recorded growth.

In the spare parts business, which developed particularly well in Germany, Poland and the Americas, sales climbed 17% to EUR 283m and EBIT by 14% to EUR 33m. Special Applications benefited from good demand for agricultural and construction machinery, with sales rising 13% to EUR 189m and EBIT increasing by more than two thirds to EUR 32m.

In November 2021, Hella had already lowered its company-wide sales and earnings forecast. The firm is now anticipating currency and portfolio-adjusted sales of between EUR 5.9 bn and EUR 6.2 bn (previously EUR 6 bn to EUR 6.5 bn) for the 2021/2022 financial year plus an EBIT margin adjusted for structural measures and portfolio effects of some 3.5% to 5% (previously 5% to 7%).

The management also expects further declines for the current quarter of the financial year, in particular, due to the material and component crisis and rising costs. “The industry environment remains challenging,” says Breidenbach. He reckons that the component shortages will most likely continue on into 2023.
17.01.2022 Plasteurope.com [249407-0]
Published on 17.01.2022
Hella: Chip-Krise und Kostensteigerungen beuteln den BetriebsgewinnGerman version of this article...

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