REGENSBURG (dpa-AFX) - Automotive supplier Vitesco slipped into the red at the start of the year due to high costs for its restructuring. However, Group CEO Andreas Wolf believes his company, which has focused on e-mobility since its spin-off from Continental two years ago, is on the right track. "E-mobility is a global megatrend. In all relevant markets, sales of electrified vehicles are recording enormous growth," he said in Regensburg on Friday. To meet its annual targets, the Bavarians want to pass on the increased costs to their customers. However, Vitesco shares slipped on the stock market.

In early trading, the stock lost more than six percent at times, bringing up the rear in the SDax, the index of smaller stocks. However, the share price had risen almost uninterruptedly since mid-March. One stock trader therefore spoke of profit-taking. The figures were not good enough to prevent this, he said. Due to the price losses of the morning, the year-to-date gain was reduced to just under 14 percent.

The manufacturer of drive technologies brought in orders worth 1.4 billion euros in the first quarter. According to the company, around 60 percent of these orders were for electrification components.

However, the Group had to cope with numerous restructuring measures in the first quarter. For example, the previously four business units were reorganized into two new units. As a result, the company now has a clear focus, said CEO Wolf in a video conference with journalists. The task now, he said, was to "reduce non-core technologies.

In addition, the start of the year was negatively impacted by higher personnel costs, the build-up of inventories and high investments in software and the processing of orders from previous quarters, among other things. Due to the current supply bottlenecks, Vitesco is repeatedly forced to stockpile scarce components, explained CFO Werner Volz. Accordingly, the cash flow of the Regensburg-based company was also deep red.

In terms of sales, the increasing focus on electrification was noticeable. While Vitesco's growth in new technologies was above average compared to the market, the group lost sales in old technologies, the CFO said. The increase in sales in the reporting period of around two and a half percent to 2.3 billion euros was thus unable to keep Vitesco from falling back into the red in the quarter.

The loss before interest and taxes (Ebit) in the period from January to March was 25.3 million euros, after the Group had earned 37.6 million euros a year earlier. Even adjusted for special effects, operating profit fell by more than a fifth to 37.1 million euros. Below the line, the Group loss widened to almost 51 million, compared with minus 11.3 million at the start of 2022.

"We are confident that we will achieve our full-year results with the help of our cost discipline and operational optimizations," Volz stressed. However, the second quarter is likely to remain challenging due to possible further supply bottlenecks - but Vitesco sees increasing improvement here. At the same time, he said, the elimination of Covid restrictions and the likely improved availability of required materials give hope for a year-on-year increase in global vehicle production in the second quarter.

Vitesco has set its sights on more sales and profits this year. To that end, the group is currently negotiating price increases with its customers, group CEO Wolf said. "We want to pass on at least 80 percent of the cost increases." The management board therefore expects accelerated growth momentum in the course of the year. In addition, there will still be some project ramp-ups, it said.

The margin is also expected to improve significantly over the year as a whole. Here, the Management Board is targeting 2.9 to 3.4 percent on an adjusted basis for 2023, after the Group achieved 2.5 percent here in the previous year. In the first quarter, however, Vitesco was still far from achieving this target. Adjusted operating margin fell by 0.5 percentage points to 1.6 percent. "We will see catch-up effects from the second, third quarter onwards," Volz expressed confidence./tav/stw/stk