Hella starts the new fiscal year better than expected

Consolidated sales in the first quarter (1 June to 31 August 2020) dropped by 10.6% to EUR 1.4 billion (prior year: EUR 1.5 billion). The company's adjusted earnings before interest and taxes (adjusted EBIT) dropped to EUR 56 million (prior year: EUR 111 million). Correspondingly, the adjusted EBIT margin amounted to 4.2% (prior year: 7.3%). Due to provisions amounting to EUR 169 million taken into account in the first quarter for the long-term programme to increase competitiveness in Germany, HELLA's reported EBIT for this period is minus EUR 115 million (prior year: EUR 111 million). "As before, the environment for the entire automotive industry remains very challenging. Global light vehicle production continued to fall in the first three months of the new fiscal year, although not as significantly as first assumed," says HELLA CEO Dr. Rolf Breidenbach, in a press rlease. "This is also reflected in our financial figures. In fact, we have performed better than we expected we would back at the beginning of the fiscal year. It is particularly encouraging that we remained operationally profitable in the first quarter despite the challenging market environment. This is not least due to our consistent cost management." Due to the lower passenger vehicle and light commercial vehicle production figures, sales in the Automotive segment fell by 12.6% to EUR 1.2 billion (prior year: EUR 1.3 billion). However, the business has held up better than the market itself, particularly in Europe and America, and has also recovered considerably compared with the fourth quarter of the prior fiscal year, the company states in the press release. The EBIT of this segment has dropped to EUR 41 million (prior year: EUR 92 million), which equates to an EBIT margin of 3.5% (prior year: 6.9%). The main reason for this is the continued reduction in capacity utilisation. After the performance of first three months, HELLA has confirmed its outlook for the current fiscal year (1 June 2020 to 31 May 2021). For this time period, company expects sales to be in the range of EUR 5.6 billion to EUR 6.1 billion, and an adjusted EBIT margin in the range of 4.0% to 6.0%. "The outlook for the coming months is relatively positive for us. The signs indicating a slight recovery in the market during the current fiscal year have intensified again recently,” says Dr. Rolf Breidenbach. “Taking the continuing unforeseeable consequences of the global Covid-19 pandemic into consideration, there are still high levels of market uncertainty that could have an impact on the development of our business. We are, therefore, remaining with the previously stated outlook for the time being."