Nexteer Reports 2019 Financial Results

Company Continues Diversification & Globalization Across Customers, Products & Footprint; Achieves Strong Bookings & Increasing Backlog, Anticipates COVID-19 2020 Impact

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Nexteer Automotive

Mar 29, 2020, 21:30 ET

AUBURN HILLS, Mich., March 29, 2020 /PRNewswire/ -- Nexteer Automotive today reported annual results for its fiscal year ended December 31, 2019. The Company's 2019 financial results were impacted by various environmental challenges including lower OEM light vehicle production across all regions, led by a decline in China, a GM-UAW labor strike in North America interrupting vehicle production, reduced revenue from a North America customer's vehicle platform transition and unfavorable foreign currency.

Nexteer reported 2019 revenue of US$3.576 billion which was lower by 8.6% when compared with 2018. Profit attributable to equity holders for the year was US$232.4 million, a reduction of 38.8% compared with 2018, largely reflecting the impact of lower revenue. During 2019, Nexteer generated US$117.9 million in cash flow from operating activities less cash used for investing activities and the balance sheet remained strong at December 31, 2019. Nexteer's Backlog of Booked Business stood at US$26.4 billion at the end of 2019 – a 4.4% increase year-over-year from 2018.

"While the macro environment broadly impacted the automotive industry in 2019, united as a strong and resilient One Nexteer team, we navigated the year's challenging landscape and continued to position Nexteer for future success. As a leader in intuitive motion control, we are focused on winning the long game and believe our strategies for profitable growth will benefit Nexteer and our shareholders over the long-term," said Guibin Zhao, CEO of Nexteer Automotive.

Strong Bookings & Backlog
Despite headwinds, Nexteer achieved strong performance in bookings, new business conquests and backlog. Nexteer secured US$7.0 billion in new bookings of which 50 percent were conquest awards. Notable expansion was achieved in Europe with a breakthrough Dual Pinion EPS customer win – a global first in this EPS architecture – secured in 2019. Nexteer also grew its backlog to US$26.4 billion.

Globalization & Diversification Across Customers, Product & Regions
In addition to a solid backlog, Nexteer further diversified across customers, products and markets with 45 customer program launches during the year (compared to 22 launches in 2018). These programs spanned multiple customers, product lines, and regions – including Nexteer's first Brush EPS launch in India, as well as the first EPS launch from Nexteer's new production facility in Morocco.

Nexteer also expanded its global footprint to capitalize on growth opportunities, further globalize engineering expertise, drive efficiencies and enhance customer responsiveness. Footprint expansion included the opening of the Asia Pacific Technical Center in Suzhou, China in January 2020, as well as a software center in Bengaluru, India and EPS production facilities in Liuzhou and Wuhan, China in 2019. In addition, Nexteer's new Morocco facility went from field to factory in 10 months and launched its first EPS program in late 2019.

Technology Leadership in Intuitive Motion Control
Nexteer earned GM's PRIME Supplier Status and Ford's Allied Business Framework (ABF) Supplier status. Both signify a long-term commitment and strategic collaboration as GM and Ford strive to realize their visions for a Connected, Automated, Shared and Electric (CASE) future.

Nexteer is also exploring shuttling goods through a development partnership with a leader in Last Mile Delivery Services. Nexteer is leveraging its 10 FIT Steering Systems and dual-path processing software for a test fleet application in 2020.

In addition, Nexteer teamed with Continental, CNXMotion (a Nexteer-Continental joint venture) and others on an autonomous people mover project. As announced by Michigan's Governor, Gretchen Whitmer, on October 22, 2019, the team "will provide a fixed-route shuttle, utilizing three, automated 15-passenger vehicles. There will also be capacity for a 'shuttle train,' carrying groups of up to 45 people at one time". The demonstration will feature Nexteer's Steer by Wire, software technologies and systems integration expertise.

2020 COVID-19 Impact
While Nexteer's annual results focus on its fiscal year ended December 31, 2019, the Company is actively monitoring and responding to the rapidly developing worldwide situation regarding COVID-19.

The World Health Organization declared the COVID-19 outbreak as a pandemic as the virus has continued to expand throughout Asia, Europe and North America, with many countries and jurisdictions declaring state of emergencies and implementing public safety actions in an attempt to contain further spread. The Company has taken commensurate actions outlined by both health agencies as well as complying with country-specific mandates.

During the course of February and March 2020 many of the Company's OEM customers announced plans to temporarily close their production facilities in China, Europe and North America. As a result, the Company is coordinating closely with each of its impacted customers and is adjusting production at its manufacturing and supporting facilities in the United States, Mexico, China, Poland and elsewhere as necessary.

Nexteer is unable to predict additional impact of the COVID-19 pandemic at this time due to the dynamic situation and undefined impacts on afflicted regions' economies as well as the inherent difficulty in predicting potential impact on the Company's facilities, employees, customers, suppliers and logistics providers.

ABOUT NEXTEER
Nexteer Automotive (HK 1316), a global leader in intuitive motion control, is a multi-billion dollar global steering and driveline business delivering electric and hydraulic power steering systems, steering columns, driveline systems, as well as advanced driver assistance systems (ADAS) and automated driving enabling technologies for original equipment manufacturers (OEMs). The company has 28 manufacturing plants, four technical / software centers and 14 customer service centers strategically located in North and South America, Europe, Asia and Africa. The company serves more than 60 customers in every major region of the world including BMW, Fiat Chrysler, Ford, GM, PSA Groupe, Toyota and VW, as well as automakers in India and China. www.nexteer.com

SOURCE Nexteer Automotive