Tier 1 auto supplier Mahle has announced its financial results for 2023. The company reported revenue of 12.8 billion euros (Rs 112,486 crore) and net profit of 26 million euros (Rs 228 crore).
This result it says was achieved despite difficult global conditions and rising costs, bringing the company back in profitability.
Arnd Franz, Chairman of the Management Board and CEO, Mahle said, “2023 was an important year for Mahle. We have a strong market position in our core products and, thanks to our innovations in e-mobility, growing acquisition successes in this sector as well. We are on the upswing. Even though we have another highly volatile year ahead of us. We are heading in the right direction.”
He further stated that the reorientation of the group, as part of the strategy Mahle 2030+ toward the three strategic areas of electrification, thermal management, and sustainable combustion engines was paying off.
The tier 1 supplier states it consistently worked on improving its earning power and adjusting its portfolio. Examples of this include the group’s divestiture of its 50 percent stake in the joint venture BHTC, and the sale of its original equipment business with thermostats.
“We will continue along this path in 2024. The goal is to continuously improve our profitability through – for example – excellence initiatives in purchasing, production, sales, and administration,” said Markus Kapaun, member of the Management Board of the MAHLE Group and CFO.
All business units and world regions contributed to the growth in sales. In Europe and North America in particular, the business units primarily connected to the internal combustion engine grew significantly. The sales of engine systems and components grew by 9.3 percent globally, adjusted for exchange rate effects, to 2.6 billion euros. The Filtration and Engine Peripherals business unit reported sales growth of 9.7 percent, adjusted for exchange rate effects, to 2.1 billion euros. The Aftermarket business unit also recorded impressive results. Its sales grew by 22 percent, adjusted for exchange rate effects, to 1.3 billion euros.
Electrification at the core
Mahle claims it now generates over 60 percent of its sales from technologies and products not directly related to passenger car combustion engines. Accordingly, business units strongly associated with electrification grew sales: the Electronics and Mechatronics business unit increased its sales slightly to 1.4 billion euros, and the Thermal Management business unit grew by 4.1 percent to 4.6 billion euros.
Still, both business units felt that sales of battery-powered electric vehicles were not yet as robust as planned. Mahle says it is positioning itself to meet increasing demand. To this end, it has continued to expand its product portfolio for electric vehicles in thermal management, and will manufacture new products such as air conditioning systems and battery cooling plates at its European locations.
“Electrification is the topic of the future. Our focus is on electric drives and intelligent charging. We are doing everything we can to make e-mobility more attractive and more affordable,” Franz said. With a new technology kit for electric motors, Mahle is offering drives for passenger cars and commercial vehicles that efficiently and consistently deliver high peak performance without requiring rare earths.
Further, the new automated positioning system from Mahle has been declared the global standard for wireless charging of electric vehicles. It also recently received two major orders for its new thermal management module, with an order volume totaling just under 1.5 billion euros. The modules combine a number of components for heating and cooling various systems in the vehicle. In addition to smaller installation spaces and drastically reduced assembly efforts and expenditures, the modular approach enables significantly more efficiency. This approach can increase the cruising range of an electric car by up to 20 percent, as well as markedly improving charging speed. In total, 2023 was a successful acquisition year, with new orders totaling a volume of more than 10.5 billion euros.
R&D and future legislation
In 2023, Mahle research and development expenses increased to 673 million euros. This amounted to 5.3 percent of sales and resulted in 341 new patent applications, as well as 502 inventions. About 70 percent of patent applications were related to electrification.
“As a foundation-owned company, social participation and respect for people and the environment form core Mahle values. For this reason, like other companies, we require the right framework conditions,” said Franz.
This is why the European Parliament election in June will play a central role for Mahle. In the next legislative period, it hopes for a strong industrial policy focused on competitiveness and location conditions.
“We advocate a fact-based policy that does not rely on bans in technology, but rather on diversity,” continued Franz. He has renewed his call for a multi-path strategy for drives, such as those Japan, China and North America are already pursuing.
“We need responsible regulatory action that is aligned with reality – not only so firms can work in a future-proof and profitable way, but also so that the industry can play an active part in shaping the coming employment and social ramifications of the technological transformation.”
