German automotive components manufacturer Mahle has been reorienting itself in light of the transformation in the automotive industry. Electrification and thermal management as well as components for high-efficiency green internal combustion engines have been at the core of the corporate strategy Mahle 2030+.
The company has announced its financial results for 2022, generating 12,434 million euros (Rs 109,269 crore), a growth of 13.72 percent over 2021. Interestingly, India which at present contributes a small percentage or 3 percent (400 million euros / Rs 3,515 crore) of its overall revenue was one of the most stable markets for the company for the last 2-3 years.
In India, Mahle has established 13 factories, employs 4,500 people, and considers the country an important market globally. It is already supplying e-drive systems for its EV customers in India. It is also in advanced discussion and has been nominated by a big manufacturer for supplying thermal management solutions, said Martin Wellhoeffer, currently EVP Sales of the Group, who will head the Mechatronics and Electronics business unit as Management Board Member from May 1, 2023. He was responding to a query by Financial Express.
Globally, the company considers sales potential in connection with electric cars to be three times as high as with internal combustion engines. “With a large number of innovative, high-efficiency products for e-mobility and our proven system competence in thermal management, we will leverage growth opportunities,” said Arnd Franz, CEO, at the annual press conference held on Tuesday in Stuttgart.
The group recorded an operating profit. “2022 was an extraordinarily good year for MAHLE in terms of orders received. We will benefit from the impetus generated and continue our upturn,” added Franz. In 2022, the technology group received new orders for more than 11 billion euros (Rs 96,668 crore), about half of which are not dependent on the internal combustion engine. The strongest growth was experienced in the business units of Thermal Management (16 percent) and Electronics and Mechatronics (13 percent) – both especially relevant for e‑mobility. Double‑digit growth was also recorded in the business units connected with the internal combustion engine, as well as in spare parts and accessories business.
With its group-wide program. MAHLE is boosting earnings power and liquidity as well as efficiency in all functional areas. “By 2025, we want to be back on track for success. Earnings take priority over sales. And our cost management must become considerably faster,” said Franz, who has been Mahle CEO since November 2022.
Net loss in 2022
While Mahle posted negative EBIT for the first six months of the year, earnings improvements in the third and fourth quarters led to a positive operating result. Nevertheless, the operating profit was lower than in the previous year, at 60 million euros (Rs 527 crore). But it was not possible to compensate entirely for the massive additional costs of 800 million euros (Rs 7,030 crore) as a result of the crisis during the reporting period. After financing expenses and taxes, Mahle reported a consolidated net loss of 332 million euros (Rs 2,917 crore) for 2022 and is aiming to achieve turnaround in 2023.
The group has a solid financial foundation for its strategic reorientation in the form of committed credit lines and liquid funds totaling 2.3 billion euros (Rs 20,212 crore). This figure includes a loan of 300 million euros (Rs 2,636 crore) granted by the European Investment Bank for the development of zero-emission vehicle technologies.
The company says it is consistently forging ahead with its technological transformation. 5.4 percent of sales are used to fund research and development, and a large part is invested in the new strategic areas. Around 70 percent of the new patent applications, totaling almost 400 was submitted in 2022 concerned electrification.
Focus on electrification
Within the framework of its electrification strategy, the company is focusing mainly on electric drives and smart charging. It has developed two new types of electric motor, which have attracted a strong response from customers: the Superior Continuous Torque (SCT) electric motor, which it says is the only electric traction motor available on the market to date which can deliver high-power continuously. It is therefore especially attractive for use in commercial vehicles.
The Magnet-free Contactless Transmitter (MCT) electric motor requires no rare earth elements and works extremely efficiently without wear. In Mahle chargeBIG, it has a tried and tested charging solution for parking lots available in the marketplace. In addition, it is also working on wireless charging together with Siemens.
The company is betting on value creation for thermal management which will play an important part in EVs. Its latest electric compressor is claimed to be the most powerful in the world, with a rating of up to 18 kilowatts. To date, the total order volume for electric compressors has reached 1.4 billion euros (Rs 12,303 crore). Another highly successful product of the company is the battery cooling plate, which allows fast charging, long ranges and a long service life for sensitive lithium-ion batteries.
