D'IETEREN : FULL-YEAR 2023 RESULTS

5 March 2024 - Results

Strong performance mainly driven by D'Ieteren Automotive, Belron, and the growth and full-year consolidation of PHE

- This is an abstract. For further details, please refer to the full press release -

Full-year 2023 highlights

D'Ieteren Group reports another year of strong growth, primarily driven by D'Ieteren Automotive and Belron, as well as strong growth and the full-year contribution from PHE. The Group's key performance indicator (KPI) - the adjusted consolidated profit before tax, Group's share - reached €970.8m, up by 28.1% compared to 2022, with Belron at 50.20% for both periods (€968.9m with Belron at 50.01%). On a like-for-like basis, excluding PHE for both periods, the KPI grew by 17.1% YoY.

• Belron'sadjusted profit before tax, Group's share improved by 17.5% YoY to €511.0m, reflecting solid top-line trends despite adverse FX movements and a strong fall-through with a 226bps YoY improvement in its adjusted operating margin of 20.5%.
• D'Ieteren Automotive, boosted by the restored car production levels and deliveries, market share gains and tight cost management, posted a 36.6% growth in adjusted profit before tax, Group's share to a record €210.7m. The Belgian new car market increased by 30.2% YoY.
• PHE, consolidated since August 2022, contributed for €137.6m to the Group's adjusted profit before tax, Group's share. This performance was mainly driven by a solid level of activity, price inflation and good cost control.
• TVH recorded an adjusted profit before tax, Group's share of €74.8m, down by -24.4% YoY, the decrease being essentially attributable to the cyberattack incurred on March 19th which led to a significant temporary interruption of activity, combined with adverse FX movements and the sales loss following the suspension of TVH activities in Russia.
• Moleskine was impacted by a context of destocking policies at retailers and e-commerce platforms and restrictions on corporate gifting budgets, related to pervasive uncertain economic conditions in 2023. In addition, interest costs increased (to the Corporate & unallocated segment) and Moleskine recorded a €2.2m adjusted profit before tax, Group's share in 2023 versus €12.8m in 2022. Continued efforts on costs lead to a robust and higher adjusted operating result margin of 18.0%.
• Corporate & Unallocated (including corporate and real estate activities) reported an adjusted profit before tax, Group's share of €34.5m compared to €10.7m in 2022, largely thanks to higher interest income on the net cash position of €915.9m excluding €272.4m of inter-segment loan, versus €322.0m at the end of 2022.
• Free cash flow Group's share reached €605.4m versus €49.0m in 2022, with all segments contributing to the YoY improvement, in particular Belron's, D'Ieteren Automotive's and PHE's operational results, and significant working capital improvements at Belron, D'Ieteren Automotive and TVH as the supply chain normalised.
• D'Ieteren Group obtained validation of its GHG emission reduction targets by the Science Based Targets initiative (SBTi). As part of these targets, the Group commits to reduce absolute scope 1 and 2 GHG emissions by 30% by 2027 from a 2021 base year, and to have 100% of its portfolio covered by a validated SBT by 2027.
• The Board of Directors proposes a gross ordinary dividend of €3.75 per share related to the financial year 2023 (versus €3.00 in 2022).

Outlook 2024

For 2024, D'Ieteren Group expects its adjusted profit before tax, Group's share to grow by a mid-to high single digit percentage YoY. This improvement is expected to be driven by the continued growth from the businesses, and assumes no further escalation in geopolitical tensions nor other major unforeseen events and in an uncertain macroeconomic environment.

It assumes foreign exchange rates that are in line with the rates that prevailed on December 31^st, 2023 and a 50.3% economic interest in Belron for both periods. The comparative figure for 2023 is €962.4m. See appendix for 2023 comparative figures for Belron, TVH and D'Ieteren Group at these foreign exchange rates and a 50.3% stake in Belron.

The following financial performances are expected from the portfolio companies:

• Belron
  • Belron expects a mid- to high single digit organic sales growth due to price / mix and increased ADAS recalibration penetration with low single digit volume growth and a normalised inflation rate.
  • Top-line trends, productivity improvements, transformation efficiency gains and lower costs related to the transformation programme should lead to a continued adjusted operating result margin improvement versus 2023 (20.5% in 2023), on track to reach the 23% 2025 ambition. Costs related to the transformation programme should amount to around €90m, of which c.€35m in adjusting items (2023: €124.1m of which €57.0m in adjusting items).
  • Free cash flow is expected to remain at high levels.
• D'Ieteren Automotive
  • The Belgian market is expected broadly flat, at 480,000 new registrations (versus gross registrations of 476,675 in 2023).
  • After a record 2023, D'Ieteren Automotive's sales should be supported by a still high order backlog in new vehicles in the first half of 2024, while visibility on the second semester is limited.
  • Adjusted operating result margin is expected to slightly erode versus 4.2% reported in 2023 as the mix of deliveries continues to normalise and costs for some IT projects increase.
  • Free cash flow is expected to improve further from 2023 level of €139.2m.
• PHE
  • PHE expects a mid-single digit organic sales growth driven by market share gains and a normalised pricing environment.
  • Adjusted operating result margin is expected to remain stable compared to 2023 (9.1%) as higher sales might be fully offset by some variable costs inflation.
  • Non-controlling interests related to some of PHE's acquisitions should represent around €10m of PHE's adjusted profit before tax, Group's share (€8.9m in 2023).
• TVH
  • Organic top-line is expected to improve by around 10%, reflecting a normalised inflationary environment and restored volume growth versus 2023, which was impacted by the cyberattack.
  • For the same reasons, adjusted operating result margin is expected to improve by around 100bps versus 2023 (13.6%).
  • Free cash flow generation is expected to be somewhat lower than the €85.6m generated in 2023, due to growth-related investments.
• Moleskine
  • Sales are expected to grow by a low double digit percentage compared to 2023, skewed towards the second half of the year.
  • Adjusted operating result margin should show at least 150bps improvement, reflecting top-line trend and operating leverage.

- End of abstract -

Contact

Francis Deprez, Chief Executive Officer
Edouard Janssen, Chief Financial Officer

Stéphanie Voisin, Investor Relations - Tel: + 32 (0)2 536.54.39
E-mail: [e-mail] - Website: www.dieterengroup.com