2024 half-year results

Paris,  

July 23^rd, 2024, at 7am

Solid earnings growth in H1 2024

Revenue^a) up +3.5%^c),  outperforming the market^j) by +3.8 points

Growth acceleration in the United States,  the #1 contributor to revenue

Operating margin^d) of €234 million, up significantly by +12% on H1 2023,  driven by the historical businesses

Strong commercial momentum,  particularly in hydrogen and lighting

2024 full-year objectives confirmed

•       H1 2024 economic revenue^a) of €5,939 million, up +2.1% (+3.5% LFL^c)), outperforming global automotive productionⁱ⁾ by +3.8 points, mainly driven by strong growth in the United States.

•       Operating margin^d) of €234 million, up +€24 million, or +12%, driven by more robust activity in H1 2024 compared to H1 2023, as well as controlled cost management. The three business groups, Exterior, Modules and C-Power, reported an improvement in their operating margin year-on-year.

•       Net result, Group share of €100 million in H1 2024, stable on H1 2023, after an increase in financial expenses due to higher interest rates.

•       Strong free cash flow^g) generation of €157 million. Adjusted for the impact of real estate disposals in H1 2023, free cash flow generation in H1 2024 increased by +€20 million year-on-year.

•       Reduction in net debt to €1,491 million, down -€49 million on December 31, 2023, with leverage of 1.6x EBITDA.

•       Good commercial momentum in lighting, as well as hydrogen with several orders in rail mobility.

•       Ongoing strategic initiatives to achieve Scope 1 & 2 carbon neutrality by 2025^[2].

•       Distribution of an interim dividend of €0.24 per share for 2024.

•       Confirmation of the outlook for 2024, with an improvement in all financial aggregates compared to 2023: revenue, operating margin, net result Group share, free cash flow and net debt.

Laurent Favre – Chief Executive Officer of OPmobility said:

“OPmobility recorded solid growth in the first half of 2024 across all business segments, outperforming the market and improving its profitability. In a complex environment, marked by a slowdown in the European automotive market, but also lower than expected growth in electric vehicles, the Group improved all its financial aggregates while continuing to deleverage. OPmobility is fully on track and this performance demonstrates the benefits of the transformation we are pursuing each month to address the new mobility challenges. These good results are also a reflection of our geographical diversification strategy - the United States continues to contribute the most to Group revenue - and our customer mix strategy, with new hydrogen orders in the rail market. At the same time, we are continuing our climate actions, to achieve carbon neutrality in our operating activities by 2025. These results, achieved thanks to the mobilization and commitment of our 40,300 employees, form a solid foundation inspiring confidence in the achievement of our 2024 objectives.”

2024 half-year results

The OPmobility SE Board of Directors, chaired by Mr. Laurent Burelle, met on July 22, 2024, and approved the consolidated financial statements for the half-year ended June 30, 2024.

The statutory auditors have conducted a limited review of the financial statements.

Figures communicated are presented using the new segment reporting formatⁱ⁾ introduced on the presentation of the 2023 annual results, comprising three segments:

-          Exterior Systems, which includes the Exterior and Lighting business groups;

-          Modules, which comprises module design, development and assembly;

-          Powertrain, which brings together the C-Power (energy and emission reduction systems, and batteries and electrification systems) and H₂-Power (hydrogen activity) business groups.

OPmobility reported economic revenue^a) of €5,939 million for H1 2024, up +2.1%^a) and +3.5%^c) like-for-like, confirming the Group’s strong commercial momentum mainly driven by the Exterior and Modules business groups. In addition, Group economic revenue^(a) increased significantly by +6.4% compared to the second half of 2023. 

The joint ventures, which mainly manufacture exterior car body parts in China with YFPO, reported like-for-like growth of +5.4%^c) in H1 2024.

•       Exterior Systems: economic revenue^a) increased by +0.5% (+1.5% LFL^c) ) compared to H1 2023. The Exterior business group benefits from a solid order book recorded in recent years. Exterior business group growth more than offset Lighting revenue, which contracted compared to H1 2023, in line with Group forecasts. This decline was due to a lower order book prior to the acquisition of this business group by OPmobility. Lighting order intake is expected to significantly outpace revenue in 2024, ensuring future growth. 

•       Modules: economic revenue^a) increased by +7.3% (+8.3% LFL^c)) compared to H1 2023, with rising assembled module volumes at the Austin plant in Texas, operational since September 2023. 

•       Powertrain: economic revenue^a) of €1,368 million (+1.7% LFL^c) year-on-year). Overall, C-Power levels remained comparable to H1 2023, with trends varying across regions. C-Power is consolidating its leading position in the fuel tanks and emission reduction systems production market.

OPmobility consolidated revenue^b) amounted to €5,413 million in H1 2024, up +2.3% (+3.3% LFL^c)) year-on-year. It includes a currency effect of -€52 million, mainly on the Argentine peso and the Chinese renminbi.

In a stable market, OPmobility outperformed automotive production^j) by +3.8 points

According to S&P Global Mobility^j), global automotive production is stable in H1 2024 at  -0.3%, after increasing +12.4% in H1 2023^j) alongside an accelerated recovery in production. OPmobility therefore outperformed the market by +3.8 points in H1 2024, confirming the Group’s ability to deliver above-market growth in 2024^j).

•       In Europe, economic revenue^a) totaled €2,995 million, stable on H1 2023. The Group outperformed automotive production^j) by +3.8 points in this region, boosted mainly by the Exterior business group in H1 2024, with several production launches in Spain, primarily for Stellantis commercial vehicles, in Poland, for Skoda Kodiaq and in Slovakia for Citroën C3. 

•       In North America, economic revenue^a) totaled €1,769 million and represented 30% of total Group revenue in H1 2024, compared to 27% in H1 2023, contributing to a more balanced geographical revenue. In this region, revenue^a) increased significantly by +10.8% (+10.8% LFL^c) ) year-on-year, outperforming the market by +9.6 points. This growth was driven primarily by the Modules business group, boosted by increased volumes of modules assembled at the Austin plant, as well as by the Exterior business group with, notably, the ramp-up of Cadillac Lyriq production in the United States.

•       In China, which generates 7% of Group sales, economic revenue^a) totaled €443 million in H1 2024, down -14.2% (-10.8% LFL^c)) year-on-year. The performance of the C-Power and Modules business groups was impacted by local electric vehicle production. At the same time, YFPO, the joint venture with Yanfeng, produced more exterior parts for non-local companies while continuing to diversify its portfolio to local and new players.

•       In Asia excluding China, Group economic revenue^a) amounted to €467 million in H1 2024, up +2.7% year-on-year (+7.7% LFL^c)), outperforming automotive production^j) by +12.1 points. OPmobility continues to see sales increase in this region, driven by the solid performance of the C-Power business group, particularly in South Korea and India, in a growing market. The Group’s Modules business continues to grow through the SHB joint venture in South Korea.

+12% increase in the Group operating margin

In H1 2024, the Group operating margin^d)totaled €234 million compared to €210 million in H1 2023, an increase of +€24 million, representing an operating margin of 4.3% of Group revenue, up +0.3 points. OPmobility also posted strong operating margin growth of +€49 million, or +26%, compared to the second half of 2023.

With stable market volumes in H1 2024 and steady high inflation, the Group benefited from higher volumes while controlling the impact of increased costs through flexible production and structure costs, as well as progress in discussions with automotive sector stakeholders.

The Exterior Systems operating margin^d) amounted to €142 million in H1 2024, representing 5.6% of revenue^b), a solid +14.5% increase on H1 2023 mostly attributable to a higher level of activity of the Exterior business group.

The Modules operating margin^d) amounted to €33 million in H1 2024, i.e. 2.2% of revenue^b), up +0.2 point on H1 2023. A better geographic and customer mix contributed to this improvement in operating margin, which is expected to continue throughout the year.

The Powertrain operating margin^d) amounted to €62 million in H1 2024, i.e. 4.5% of revenue^b). C-Power’s Internal Combustion Engine (ICE) business continues to secure its margin rate. The hydrogen (H₂-Power) and electrification (e-Power) activities, for their part, continued to ramp-up steadily in line with the Group’s strategy.

Stable net result of €100 million

Net result, Group share is €100 million (1.9% of consolidated revenue^b)). The net result for H1 2024 is comparable to the net result for H1 2023, and includes:

-          The improvement in the operating margin, which offset the increase in financial expenses in an environment of high interest rates. Financial income and expenses totaled €63 million in H1 2024, compared to €49 million in H1 2023. This increase is due to higher financial costs following the rise in interest rates;

-          Other operating income and expenses of €30 million, up €11 million compared to H1 2023, mainly including reorganization costs in the C-Power and Lighting business groups and currency effects;

-          An income tax expense of €41 million in H1 2024, or 0.8% of revenue^b), stable on H1 2023. The effective tax rate is 34.1% in H1 2024.

Strong free cash flow generation of €157 million.

EBITDA^e) amounted to €471 million in H1 2024, representing 8.7% of revenue^b) compared to €463 million and 8.7% of revenue^b) in H1 2023, in line with increased activity during the year.

Investments^f) represented 4.8% of revenue^b) and are in line with the Group’s target of maximum annual investment of 5% of revenue^b). Excluding the impact of real estate disposals of €54 million in H1 2023, investments remained stable in H1 2024 compared to H1 2023.

The change in working capital requirement was +€42 million in H1 2024, vs. +€46 million in H1 2023.

Free cash flow^g) totaled €157 million in H1 2024, or 2.9% of revenue^b) compared to H1 2023. Excluding the impact of real estate disposals of €54 million in H1 2023, free cash flow generation increased by +€20 million in H1 2024 year-on-year.

Distribution of an interim dividend of €0.24 per share

The OPmobility SE Board of Directors, meeting on July 22, 2024, decided to distribute an interim dividend of €0.24 per share for 2024. The ex-dividend date for this interim dividend is July 25, 2024 and it will be paid in cash on July 29, 2024.

Continued deleveraging of the Group

At June 30, 2024, Group net debt^h) totaled €1,491 million compared to €1,540 million at December 31, 2023, a -€49 million reduction. Plastic Omnium’s leverage is therefore 1.6x EBITDA at the end of June 2024 vs. 1.7x EBITDA at the end of December 2023.

The Group continues to reduce its debt while investing in growth drivers. At June 30, 2024, the Group has liquidities of €2.3 billion, comprising €451 million in available cash and €1.9 billion in confirmed, undrawn credit facilities, with an average maturity of 3 years and no covenants.

In H1 2024, the Group pursued its financial strategy, diversifying its sources of financing and extending the average maturity of its debt, with, in March, the successful issue of a €500 million bond due in March 2029 and with a coupon of 4.875%. In addition, on March 1, 2024, S&P Global Ratings awarded the Group a credit rating of BB+ with a stable outlook. Finally, in June, the Group repaid a €500 million bond loan maturing in 2024.

OPmobility continues its strategy to support developments in mobility

The Group becomes OPmobility

By becoming OPmobility on March 27, 2024, the Group turns a new page in its history and confirms the acceleration of its strategic transformation as a leading player in sustainable and connected mobility. In just a few years, the Group has implemented an ambitious strategic roadmap, leading it to diversify its activities through major acquisitions, and enlarge its customer portfolio and geographical footprint. With now five business groups as well as a dedicated software activity, OPmobility is expanding all over the world, extending its customer base to encompass all mobility players.

Conveying an optimistic vision of the future, OPmobility’s visual identity embodies the Group’s historical roots, its values and its drive for constant growth. Open to all forms of mobility, OPmobility will continue to support their transition towards decarbonization.

The Group rebalances its geographical coverage and the United States becomes the top contributor to revenue

In line with its strategy, OPmobility continues to rebalance its activities geographically to better serve its customers, while optimizing organization in its primary markets to support growth.

The inauguration in April 2024 of the new module assembly plant in Austin, Texas, to support a major player in electric mobility demonstrates the Group’s ambition to anticipate and address more rapidly regional consumer trends using adapted technologies to better capture growth in each market.

In 2024, all OPmobility business groups are now present in the United States (Exterior, C-Power, Modules, Lighting and H₂-Power), boosting the customer mix strategy to address all types of mobility and confirming the Group’s geographical diversification. In H1 2024, OPmobility generated 16% of its revenue in the United States, compared to 14% in H1 2023.

OPmobility seizes business opportunities in hydrogen energy, a choice solution to decarbonize heavy mobility 

OPmobility continues to step up its growth in the hydrogen sector, where it already has an order book of around €4 billion focused mainly on the heavy mobility segment. By securing several orders in the rail mobility sector in H1 2024, the Group confirms a further growth surge in its new operations by expanding its expertise and product portfolio to address all types of mobility, including collective mobility. These various contracts confirm our belief that hydrogen is the ideal solution to decarbonize heavy mobility and strengthens the Group’s position as global leader in hydrogen mobility.

In May 2024, OPmobility signed a memorandum of understanding with the Chinese rail giant CRRC to develop hydrogen storage systems

OPmobility, Shenergy Group and CRRC MRT Holding Group have signed a memorandum of understanding to develop high-end hydrogen storage systems for the rail market. As part of this collaboration, the three companies will combine their complementary skills and expertise and apply them to the technical and commercial development of on-board hydrogen storage solutions.

OPmobility, through its PO-Rein joint-venture, has already won a contract with the world’s leading rail manufacturer CRRC (China Railway Rolling Stock Corp.) MRT Holding Group to supply type 4 high-pressure hydrogen storage systems. They will be delivered and put into service from the end of 2024. The systems will equip the latest generation of smart trams providing public transport in the city of Kuching, in Malaysia.

OPmobility will equip the first hydrogen trains built by Stadler in Europe

In July 2024, OPmobility won a major contract with a Swiss rail manufacturer, Stadler, to equip regional hydrogen trains in Italy by the end of 2025. The Group will supply for the first time high-pressure hydrogen storage systems (eight systems per train) and 150 kW fuel cell systems (four systems per train). OPmobility will initially equip 15 hydrogen trains and should extend its deliveries in the years to come.

With their long-range and short-refueling time, hydrogen trains are particularly relevant for rail mobility carbon reduction. They can operate on all types of electrified or non- electrified tracks without the need for major infrastructure investment. Therefore, they represent a major growth potential at a time when a large part of global rail networks remain non-electrified (around 28% of the network in China, 40% in Europe and 95% in the United States).

OPmobility extends its decarbonization roadmap

OPmobility continues to roll out its carbon neutrality plan to achieve its objectives that have been recognized as being aligned with those of the Paris Agreement by the Science-Based Targets initiative (SBTi):

-          Carbon neutrality of scopes 1 & 2 by 2025^[5] (emissions related to operations, e.g. gas and electricity consumption),

-          30% reduction in upstream and downstream scope 3 emissions by 2030 compared with 2019,

-          Carbon neutrality for all scopes by 2050.

The new energy improvement program implemented since 2021 enabled the Group to further boost its energy efficiency by 20.4% in the first half of 2024 compared to 2019^[6]. Over the same period, 2 new projects of installation of solar panels have started, bringing the total number of equipped sites to 25. Therefore, at the end of June 2024, OPmobility covers 2.4% of its energy consumption (+0.4 point compared to 2023). Additional projects are scheduled to start up by the end of 2024, reducing the Group's dependence on fossil fuels.

In addition, OPmobility is continuing to expand its low-carbon power generation capacity in order to significantly increase the proportion of renewable energy in its energy mix. Since 2023, the Group has already signed 6 contracts for the direct purchase of electricity from renewable sources (PPA - Power Purchase Agreement or Virtual PPA). OPmobility will be pursuing these initiatives over the coming months. By 2026, more than 60% of the Group's energy should come from direct and virtual PPAs.  

Outlook

Following stable automotive production and a slowdown in electric vehicle sales in H1 2024, S&P^j) expects automotive production to decline in H2 2024.

In this context, the Group confirms its position as market leader based on its operational know-how, while adapting its capacities as best as possible to the production volumes in order to maintain good productivity.

Following robust growth in H1 2024 results, OPmobility confirms its annual targets with the aim of outperforming global automotive production^j) and improving all its financial aggregates (operating margin^d), net result Group share, free cash flow^g) and net debt^h)) in 2024 compared to 2023.

This press release is published in English and French. In the event of any discrepancy between these versions, the original version written in French shall prevail.

The press release and the slideshow are available at www.opmobility.com

Calendar

•     October 28, 2024: 2024 Q3 revenue

*****

About OPmobility 

OPmobility (formerly Plastic Omnium) is a world leader in sustainable mobility and a technology partner to mobility players worldwide. Driven by innovation since its creation in 1946, the Group is today composed of five complementary business groups that enable it to offer its customers a wide range of solutions: intelligent exterior systems, complex modules, lighting systems, energy storage systems and battery and hydrogen electrification solutions. OPmobility also offers its customers an activity dedicated to the development of software, OP’nSoft.

With economic revenue of 11.4 billion euros in 2023 and a global network of 152 plants and 40 R&D centers, OPmobility relies on its 40,300 employees to meet the challenges of sustainable mobility. 

Plastic Omnium is listed on Euronext Paris, compartment A. It is eligible for the Deferred Settlement Service (SRD) and is included in the SBF 120 and CAC Mid 60 indices (ISIN code: FR0000124570). www.opmobility.com

Appendix

Glossary

a) Economic revenue corresponds to consolidated revenue plus revenue from investments, by controlled subsidiaries, in joint ventures and associates consolidated at their percentage holding: BPO (50%) and YFPO (50%) for Exterior Systems, EKPO (40%) for Powertrain and SHB (50%) for Modules.

b) Consolidated revenue does not include the Group’s share of revenue from joint ventures, consolidated using the equity method, in accordance with IFRS 10-11-12.

c) Like-for-Like (LFL): at constant scope and exchange rates

i.         The currency effect is calculated by applying the exchange rate of the current period to the revenue of the previous period. In H1 2024, it amounted to -€75 million for economic revenue and - €52 million for consolidated revenue.

ii.        The scope effect was immaterial in H1 2024 and related to the consolidation of PORein from April 28, 2023.

d) Operating margin includes the Group’s share of income from companies consolidated using the equity method and amortization of intangible assets acquired, before other operating income and expense.

e) EBITDA corresponds to operating income, which includes the Group’s share of income from associates and joint ventures, before depreciation, amortization, and operating provisions.

f)   Investments comprise expenditure on property, plant and equipment and intangible assets, net of disposals.

g) Free cash flow corresponds to operating cash flow less expenditure on property, plant and equipment and intangible assets net of disposals, taxes and net interest paid, plus or minus the change in the working capital requirement (cash surplus from operating activities).

h)  Net debt includes all long-term borrowings, short-term loans, and bank overdrafts less loans, marketable debt instruments and other non-current financial assets, and cash and cash equivalents.

i)   From the publication of its 2023 annual results, the Group adapted its segment reporting to reflect OPmobility's strategic roadmap. This new presentation allows for a better assessment of the contribution of the Group’s three segments and breaks down as follows:

o   Exterior Systems, which includes the Exterior and Lighting business groups.

o   Powertrain, which brings together the C-Power (energy and emission reduction systems, and batteries and electrification systems) and H₂-Power (hydrogen activity) business groups; o Modules, which comprises module design, development and assembly activities.

j)   Global or regional automotive production data refer to the S&P Global Mobility forecasts published in July 2024 (<3.5-ton passenger car segment and commercial light vehicles).

2023 revenue and operating margin according to the new segment reporting format^(I)

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