16th Mar 2021 12:14
(Alliance News) - TI Fluid Systems PLC on Tuesday said it demonstrated "resilience" throughout 2020 during the Covid-19 pandemic despite experiencing "one of the sharpest volume drops in the history of automotive production."
The company makes products that store and move fluids, such as fuel and brake fluid, around automobiles.
TI Fluid's 2020 revenue fell substantially to EUR2.81 billion from EUR3.41 billion in 2019, in line with its forecast of EUR2.8 billion, which it expected to align with the global drop in light vehicle production volumes caused by the Covid-19 pandemic.
The company swung to a 2020 pretax loss of EUR253.8 million from a EUR201.7 million profit in 2019, while its adjusted earnings before interest and tax margin percentage was 6.2% as a result of swift action to control costs. This is "slightly better than the mid-single digit range" it previously expected.
Due to its performance being "broadly" in line with market expectations, it said, TI Fluids declared a 2020 interim dividend of 6.74 cents. This represents its only payout for the year, more than double from 3.02 cents in 2019.
"The board has decided that it would not be practical to propose a nominal final year 2020 dividend under the dividend policy. The company expects to return to its stated annual dividend policy and normal dividend payment cadence for the 2021 financial year," the firm said.
Shares in TI Fluid Systems were down 0.8% at 290.35 pence in London on Tuesday.
"The group demonstrated its business resilience in 2020 during one of the biggest declines the global automotive market has faced in modern history. In 2020, we delivered revenue broadly in line with global light vehicle production, 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," said President & Chief Executive William L Kozyra.
Looking ahead to 2021, TI Fluids said global light vehicle production volumes are expected to recover, but not quite to 2019 levels.
"We anticipate our 2021 full-year adjusted Ebit margin to recover to a high single digit and that adjusted free cash flow conversion will be similar to pre-Covid-19 levels. 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," said Kozyra.
By Zoe Wickens; [email protected]
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