Nexteer Reports First Half 2021 Financial Results

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Aug 17, 2021, 06:45 ET

AUBURN HILLS, Mich., Aug. 17, 2021 /PRNewswire/ -- Nexteer Automotive today reported first half results for the period ended June 30, 2021. The Company's financial performance during the first half of 2021 significantly improved when compared with the same period in 2020 when the global automotive industry was severely impacted by the COVID-19 pandemic. Nexteer's revenue growth in the first half of 2021 continued to outpace the increase in OEM production in served markets, reflecting the continued benefit from customer program launches.

The Company delivered strong financial results in the first half of 2021 compared with last year, despite industry-wide headwinds that began to emerge earlier in the year and which accelerated through the second quarter of 2021. These headwinds included, among other factors, global shortages in the supply of various sub-components of raw materials (principally semiconductors), rising commodity costs, significant increases in transportation and logistics costs and continued impacts from the health crisis in various countries in which Nexteer operates in or is served by its supply chain partners.

"In the first half of 2021, Nexteer successfully navigated global supply challenges and focused on delivering innovative, high-quality steering and driveline solutions for our customers around the world," said Guibin Zhao, CEO of Nexteer Automotive. "Nexteer's financial performance in the first half reflects our resilience and our commitment to our strategy for profitable growth. Going forward, Nexteer will continue to strengthen our technology leadership within key megatrends and expand and diversify our customer base. As proof points to the effectiveness of our approach are Nexteer retaining 100 percent of our incumbent business while targeting growth with additional global OEMs – such as our breakthrough Rack-Assist Electric Power Steering win with a global Japanese OEM in the first half."

First Half 2021 Financial Results
Nexteer reported first half 2021 revenue of US$1.734 billion, an increase of US$523.7 million or 43.3%, compared with US$1.211 billion for the six months ended June 30, 2020. Adjusting for favorable foreign currency translation and commodity and other recoveries, Nexteer's revenue rose by 38.4% in the first half of 2021 compared with the same period a year ago – outpacing the revenue weighted increase in OEM production for served markets for the comparative period by 730 basis points.

Profit attributable to equity holders for the six months ended June 30, 2021 was US$83.1 million or 4.8% of total revenue – an increase of US$81.8 million compared to the six months ended June 30, 2020 of US$1.3 million, or 0.1% of total revenue.

Nexteer took advantage of its strong balance sheet during the first six months of 2021, executing the early redemption of its US$250 million Notes in April 2021 and successfully refinanced its US$325 million revolving credit facility in June 2021, extending the maturity to 2026 at lower borrowing rates.

16 Successful New Customer Program Launches
In the first half of 2021, Nexteer further diversified across customers, products and markets with 16 customer program launches – marking the third consecutive year of strong program launches. Of these customers' programs, 14 represented conquest business.

Bookings, Backlog and Breakthrough Conquest
Nexteer achieved new customer program awards (bookings) of US$1.3 billion for the first half of the year – of which 89% represented conquest awards. Nexteer also retained all customer programs as the incumbent supplier for the third consecutive year. The Company also achieved a breakthrough conquest for new electric power steering (EPS) business with a global Japanese OEM. Nexteer's Backlog of Booked Business stood at US$24.5 billion at June 30, 2021.

Technology Leadership and Portfolio-to-Trend Alignment
Nexteer continues to leverage its deep technical competencies in developing innovative products and value propositions to drive future growth and customer diversification. The Company leverages its in-house competencies to extend its suite of technologies and product offerings – including extension of core products into technologies such as Steer-by-Wire (SbW), High-Output EPS (HO EPS), Dual Pinion-Assist EPS (DPEPS), Modular Column-Assist EPS (mCEPS), Stowable Columns and more. Nexteer continues to expand its software capabilities and leverage its electronics and motors expertise in providing unique and innovative solutions for global OEM customers.

In addition, megatrends influencing the automotive market and adjacent sectors represent new and unique channels for Nexteer's continued growth. The Company is well-positioned to support OEMs' future priorities in these areas. For example, Nexteer has a robust, proven technology and product portfolio to support industry megatrends like Electrification, Software, Connectivity, ADAS – Advanced Safety and Performance and Mobility-as-a-Service (MaaS). Being focused on where the industry is heading, through a strategic alignment on megatrends, contributes to the Company's relevance and will accelerate its growth.

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 27 manufacturing plants, four technical and software centers and 13 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, Ford, GM, Stellantis, Toyota and VW, as well as automakers in India and China. www.nexteer.com

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