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TI Fluid Systems (LSE:TIFS), an automotive components manufacturer listed on the FTSE 250, reported a slight decrease in revenue for the six months ending June 30. Revenue fell by 1.4 percent at constant currency to €1.719 billion (£1.490 billion). Despite this decline, the company’s share price experienced a notable increase of over 11 percent in early trading, although it remains nearly 18 percent below its price at the beginning of the year.
Margin Improvement
The rise in TI Fluid Systems' share price is largely attributed to improvements in its adjusted earnings before interest and tax (EBIT) margin. The company's adjusted EBIT increased by 4.8 percent on a constant currency basis, surpassing analysts’ expectations. The adjusted EBIT margin grew by 0.4 percentage points to 7.9 percent, driven by productivity and efficiency enhancements alongside ongoing commercial activities.
Adjusted EBIT Margin Guidance
The company has revised its EBIT margin guidance for the full year upwards to 7.6 percent. This adjustment reflects the firm’s focus on productivity improvements and its successful navigation of a challenging market environment.
Performance in Electric Vehicle Market
TI Fluid Systems has outperformed the broader electric vehicle (EV) market, which has been subdued in 2024 due to high inflation and energy costs. The company’s diverse product portfolio has played a role in its performance. Bookings increased by 11 percent to €1.5 billion (£1.29 billion), with only about one-third of these related to EVs. This underscores the advantages of having a varied product range that caters to different propulsion types.
CEO Comments
Hans Dieltjens, CEO of TI Fluid Systems, emphasized the company’s operational achievements and strategic progress. He highlighted the effectiveness of productivity and efficiency measures in improving the EBIT margin and moving towards a mid-term double-digit target. Dieltjens also noted the company’s adaptability to changing market conditions and its strong pipeline of productivity initiatives.
