Vitesco Technologies : Q1 statement / Q1 financial report 2024

QUARTERLY REPORT MARCH 31, 2024

3	Vitesco Technologies Group

VITESCO TECHNOLOGIES STARTS 2024 FISCAL YEAR WITH SOLID QUARTERLY EARNINGS

• Decline in Group sales to €1,991.9 million in the first quarter of 2024 (previous year: €2,314.2 million)
• Adjusted EBIT of €33.0 million in the first quarter of 2024 (previous year: €30.8 million) with an adjusted EBIT margin of
  1.7% (previous year: 1.4%)
• Negative free cash flow due to planned settlements of advance payment by the Continental Group and the mutual decline in contract manufacturing combined with the contractually agreed adjustment of payment terms
• Order intake of €708 million in the first quarter of 2024, of which €282 million associated to electrification business
• Unchanged expectations for global vehicle production in the current fiscal year; Vitesco Technologies' guidance for the fiscal year is confirmed

BUSINESS DEVELOPMENT IN THE FIRST QUARTER OF 2024

Vitesco Technologies achieved solid results in a persistently challenging market environment during the first quarter of 2024. Overall revenues were €1,991.9 million (previous year: €2,314.2 million), which corresponds to a decline of 13.9% on the same period of the previous year. In particular, the expected decline in contract manufacturing as well as the lack of sales from divested businesses reduced the sales development at the start of the year. The Group's EBIT, adjusted for effects from changes in the scope of consolidation, amortization from purchase price allocations as well as special topics, amounted to €33.0 million (previous year: €30.8 million), or an adjusted EBIT margin of 1.7% (previous year: 1.4%). Vitesco Technologies' EBIT on a reported basis improved to €15.4 million (previous year: -€25.3 million). Consolidated net income during the reporting period amounted to €22.7 million (previous year: -€50.7 million), which corresponds to €0.57 earnings per share (previous year: -€1.27 per share). In particular, due to the planned settlements of advance payment by the Continental Group and the mutual decline in contract manufacturing combined with the contractually agreed adjustment of payment terms, free cash flow amounted to -€90.6 million (previous year: -€41.1 million). The number of employees as at March 31, 2024, was 35,370 (previous year: 38,215).

Obligations in connection with emission related topics under the Group separation agreement continue to be recognized at €82.0 million, even when current developments are factored in .

The Group's equity as at the reporting date of March 31, 2024, was €2,904.7 million (December 31, 2023: €2,851.3 million),

which corresponds to an equity ratio of 37.8% (December 31, 2023: 37.6%). As at the end of March 2024, Vitesco

Technologies had cash and cash equivalents of €1,038.8 million (December 31, 2023: €1,063.6 million). The reduction resulted in particular from the negative free cash flow in the first quarter of 2024. Net liquidity, defined as cash and cash equivalents less financial indebtedness, was at €228.3 million (December 31, 2023: €337.0 million).

As part of the planned merger, Vitesco Technologies USA, LLC has signed a loan agreement with Schaeffler Group USA, Inc. for a total amount of USD 220 million. USD 87 million of that had been drawn in March 2024.

Vitesco Technologies was able to acquire new orders of €708 million in the first quarter of 2024, of which €282 million or about 40% was attributable to electrification business.

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EXPECTATIONS FOR THE FIRST QUARTER OF 2024

Vitesco Technologies is expecting the market environment to remain challenging in the second quarter of 2024. Even though a slight improvement should be expected for e-mobility, geopolitical uncertainties continue to result in shifted demand as well as supply chain interruptions. A slight recovery of global vehicle production should be expected in the second quarter of 2024 when compared with the previous year's quarter.

MARKET OUTLOOK AND FORECAST FOR THE FISCAL YEAR 2024

Given the business performance in the first quarter of 2024 and expectations for the second quarter of 2024, the market outlook and forecast for Vitesco Technologies' business development for the full 2024 fiscal year remain unchanged from the details provided in the annual report. As with the assumptions for global vehicle production, all expectations remain highly uncertain.

DEVELOPMENT IN INDIVIDUAL DIVISIONS

The electrification of the mobility market is an automotive megatrend and is being driven by ongoing climate change. The sales of electrified vehicles have seen enormous growth globally. Vitesco Technologies recognized this trend in its early stages and has consistently adapted to this transition.

In the first quarter of 2024, the Powertrain Solutions division generated sales of €1,273.0 million (previous year:

€1,607.7 million). The adjusted EBIT amounted to €113.8 million (previous year: €109.2 million) and thus corresponds to an

improved adjusted EBIT margin of 8.9% (previous year: 7.3%). The planned decline in sales from co ntract manufacturing for Continental as well as discontinued activities contributed to the overall declining sales within the division.

The Electrification Solutions division achieved revenue of €732.2 million during the first quarter of 2024 (previous year:

€716.8 million). Given that the delivery of battery-electric vehicles in the European market stagnated in comparison to the previous year and a postponement for some project ramp-ups in all regions in the first quarter of 2024, electrification sales were below the previous year's level. The target of reaching the break-even point for electrification during the current fiscal year remains intact thanks to the sustained trend for battery-electric vehicles globally.

Due to the high start-up costs for electrification products, the adjusted EBIT remained at the previous year's level at

-€71.7 million (previous year: -€71.6 million). The adjusted EBIT margin was -9.8% (previous year: -10.0%), also at the previous year's level.

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CONSOLIDATED INTERIM FINANCIAL STATEMENTS

7	Vitesco Technologies Group

KEY FIGURES

The accounting in the interim consolidated financial statements was carried out in accordance with International Financial Reporting Standards (IFRS). The interim consolidated financial statements have been prepared in euros (€). Unless otherwise stated, all amounts are shown in millions of euros (€ million). Please note that differences may arise as a result of the use of rounded amounts and percentages.

CONSOLIDATED INTERIM STATEMENT OF INCOME

	January 1 to March 31
€ million	2024	2023
Sales	1,991.9	2,314.2
Cost of sales	-1,707.7	-1,997.7
Gross margin	284.2	316.5
Research and development costs	-222.5	-236.5
Distribution and logistics costs	-29.1	-32.7
General administrative costs	-72.6	-62.7
Other income	102.6	82.3
Other expenses	-47.6	-92.4
Income from equity-accounted investees	0.4	0.2
EBIT	15.4	-25.3
Interest income	11.3	7.8
Interest expense	-17.1	-12.4
Effects from currency translation	1.2	9.0
Effects from changes in the fair value of derivative instruments and other valuation effects	2.3	-8.4
Financial result	-2.3	-4.0
Result before income tax	13.1	-29.3
Income tax expense	9.6	-21.4
Net income	22.7	-50.7
Basic earnings per share in €	0.57	-1.27
Diluted earnings per share in €	0.57	-1.27

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CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME

	January 1 to March 31
€ million	2024	2023
Net income	22.7	-50.7
Items that will not be reclassified to profit or loss
Remeasurement of defined benefit plans	20.4	1.3
Fair value adjustments	20.4	1.3
Tax on other comprehensive income	-6.2	0.6
Items that may be reclassified subsequently to profit or loss
Currency translation	16.4	18.6
Cash flow hedges	0.2	-0.7
Tax on other comprehensive income	-0.1	-
Other comprehensive income	30.7	19.8
Group comprehensive income	53.4	-30.9

9	Vitesco Technologies Group

CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION

ASSETS

€ million	March 31,	December
2024	31, 2023
Goodwill	786.1	786.3
Other intangible assets	394.1	335.7
Property, plant and equipment	2,259.6	2,279.7
Investments in equity-accounted investees	20.6	20.2
Other investments	15.2	15.2
Deferred tax assets	275.0	265.8
Defined benefit assets	11.0	11.6
Non-current contract assets	2.2	1.3
Non-current derivative instruments and interest-bearing investments	21.2	19.5
Other non-current financial assets	25.4	27.3
Other non-current assets	6.7	5.3
Non-current assets	3,817.1	3,767.9
Inventories	874.6	825.1
Trade accounts receivable	1,525.0	1,546.0
Current contract assets	4.3	2.0
Other current financial assets	83.7	82.8
Other current assets	262.4	252.2
Income tax receivables	73.7	33.0
Current derivative instruments and interest-bearing investments	13.6	10.4
Cash and cash equivalents	1,038.8	1,063.6
Assets held for sale	0.1	0.1
Current assets	3,876.2	3,815.2
Total assets	7,693.3	7,583.1

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LIABILITES

€ million	March 31,	December
2024	31, 2023
Subscribed capital	100.1	100.1
Capital reserves	3,487.8	3,487.8
Retained earnings	-820.3	-843.0
Other comprehensive income	137.1	106.4
Total Equity	2,904.7	2,851.3
Long-term employee benefits	601.4	624.2
Deferred tax liabilities	148.3	140.5
Non-current provisions for other risks and obligations	139.9	137.8
Long-term indebtedness	665.1	672.4
Non-current contract liabilities	16.5	2.1
Other non-current liabilities	11.3	11.0
Non-current liabilities	1,582.5	1,588.0
Short-term employee benefits	396.5	316.6
Trade accounts payable	1,842.3	1,838.6
Current contract liabilities	88.3	132.0
Income tax payables	77.5	94.2
Current provisions for other risks and obligations	398.7	424.5
Short-term indebtedness	145.4	54.2
Other current financial liabilities	182.5	208.3
Other current liabilities	74.9	75.4
Current liabilities	3,206.1	3,143.8
Total Equity and liabilities	7,693.3	7,583.1