Automotive suppliers report impressive results
March 11, 2011
Recently published financial reports are showing suppliers to the automotive industry had a very strong 2010, in some cases posting record sales, even above those of pre ‘global downturn’ figures.
As previously reported on ipmd.net, the automotive industry rebounded well in 2010, seeing annual production figures up 25.9% when compared to 2009, reaching a total of around 77.881 million units. It is perhaps no surprise, therefore, that automotive industry suppliers are reporting such positive results and are showing signs of continued optimism for 2011.
Magna International sales of $24.1 billion
One of the largest suppliers to the automotive industry, Magna International Inc, headquartered in Canada, reported sales of US$24.1 billion in 2010, an increase of 39% on 2009 figures. Operating income was $1.2 billion and net income was $973 million.
Don Walker, Magna’s Chief Executive Officer commented, “In 2010, Magna benefitted from a strong recovery in vehicle production, both in our primary markets of North America and Western Europe as well as globally. We are positioned to capitalise on continued growth in global vehicle production in 2011 and beyond, as we further expand our manufacturing footprint in a number of growing regions of the world.”
TRW Automotive post record earnings
TRW Automotive Holdings Corp. reported sales of $14.4 billion, an increase of $2.8 billion or 24% compared to 2009. Strong revenue growth combined with the company’s low cost structure resulted in record 2010 GAAP net earnings of $834 million, which compares to net earnings of $55 million in 2009.
“TRW’s solid fourth quarter performance built on the positive momentum established earlier in the year and enabled the company to post its best full year results since becoming an independent company,” stated John C. Plant, Chairman, President and Chief Executive Officer. “TRW ended the year with a significantly improved capital structure including a record low net debt level and strong performance on reducing the Company’s legacy liabilities. The outstanding business performance achieved in 2010 demonstrates TRW is executing the right strategy for long-term success.”
Record sales for BorgWarner
“For the full year, we posted record sales and earnings, and our operating income margin was the highest it has been in several years.” stated Timothy Manganello, Chairman and CEO of BorgWarner Inc. “These are remarkable accomplishments considering they were achieved with depressed volumes and immediately following one of the most difficult periods in our history.”
Full year 2010 sales for the US based company were $5,652.8 million, up 42.7% from $3,961.8 million in 2009. Net earnings were $377.4 million, compared with net earnings of $27.0 million in 2009.
Lear Corporation up 23%
Lear Corporation, a leading supplier of automotive seating and electrical power management systems based in the US, reported 2010 net sales of $12.0 billion, up 23% from 2009. Pretax income was reported at $486.0 million for the year.
“2010 marked a year of recovery in our mature markets; however, industry production in North America and Europe remains below historical levels. We were able to achieve strong financial results and generate significant cash flow due to structural cost reductions and improvements in our manufacturing footprint implemented over the past several years.” stated Bob Rossiter, Lear’s Chief Executive Officer and President.
WABCO highlights major growth in Europe, South America, China and India
Brussels based WABCO Holdings Inc., a tier one supplier to the commercial vehicle industry, reported full year 2010 operating income of $230.5 million, up from $42.8 million in 2009.
Jacques Esculier, WABCO Chairman and Chief Executive Officer stated, “During the full year 2010, we increased sales worldwide by 47% in local currencies, strongly outperforming all markets across the globe and delivering a record level of incremental operating profit margin at 27%.”
“As the commercial vehicle industry maintained its recovery throughout 2010 and each region experienced double digit growth, WABCO posted remarkably high sales growth. Indeed, our truck and bus sales increased by 60% in Europe, 66% in South America, 69% in China and 77% in India,” said Esculier.
Record sales and a positive outlook for Tenneco
Tenneco, with is headquarters at Lake Forest, Illinois, USA, has reported annual revenue for 2010 of $5.937 billion, up 28% from $4.649 billion in 2009. The company designs, manufactures and distributes a range of emission control and ride control products and systems and has reported its highest ever EBIT and EBITDA including noncontrolling interests. For the year, EBIT was $281 million ($306 million adjusted), versus $92 million ($118 million adjusted) in 2009. 2010 EBITDA including noncontrolling interests was $497 million ($517 million adjusted), compared with $313 million ($335 million adjusted) in the prior year.
Tenneco stated that for 2011 IHS Automotive forecasts that OE light vehicle production will be up in every region, compared with 2010. In North America, production is expected to be about 12.7 million units, up 7%. In Europe, production is estimated to be roughly 19.8 million units, a 3% rise. China will also be up with OE light vehicle production predicted to increase by 7% to 18.0 million units. Other markets including South America, India and Australia are all expected to show year-over-year production increases as well.
According to Power Systems Research, in 2011, Class 4-8 on-road commercial vehicle production is expected to increase in North America to 360,000 units; in Europe to 499,000 units; and to 188,000 units in Brazil. China commercial vehicle production is forecasted to be a little over one million units. Off-road commercial vehicle production in 2011 is forecasted to be 210,000 units in the U.S, and 390,000 units in Europe, stated Tenneco in their report.
“We view 2011 with optimism given a stronger OE production environment globally and the aftermarket continuing its solid performance. In addition to leveraging higher production volumes, we are launching a new commercial vehicle emission control business throughout the year,” said Gregg Sherrill, chairman and CEO, Tenneco, “Our performance this year will be driven by execution on our revenue growth opportunities, while continuing to drive operational excellence.”
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