HELLA (HLE) Investor Update summary

Market environment and outlook revision

• Global light vehicle production for 2024 revised down to -2.1%, with Americas and Europe most affected, and electrification in Europe slowed to 12% EV penetration versus 18% expected.

• Market conditions have deteriorated, with volumes down 2% from early-year estimates and significant delays in new series launches, especially impacting electrification and electronics segments.

• Sales guidance for 2024 lowered to €7.9–8.1 billion, down from €8.1–8.6 billion, due to weaker production volumes and customer-related delays.

• Operating income margin guidance is reduced to 5.5–6% from 6–7%, and net cash flow outlook is now 2.2–2.7% versus the prior 3%.

• No concrete outlook for 2025 will be provided until February 2025 due to ongoing market volatility and uncertainty.

Strategic and operational measures

• Accelerating cost structure improvements and net cash flow initiatives, including a global competitiveness program and increased synergies with Faurecia/FORVIA.

• Workforce reduced by 1,500 globally in the first eight months, with a focus on lowering R&D costs and external services.

• Tangible CapEx investments to be reduced by 15% in 2024, with further cuts planned for 2025, including halting new construction in Lippstadt.

• Implementation of the FORVIA Excellence System aims to boost plant productivity, reduce inventories, and improve working capital.

• Cost structure targeted to be reduced by 120 basis points by 2025, with an absolute cost reduction and improved cash flow as key ambitions.

Regional and portfolio focus

• Expanding business in the Americas, Japan, India, and with Chinese OEMs, with two-thirds of H1 order intake from outside Europe.

• Secured €2 billion in H1 2024 orders for Electronics and Lighting from US OEMs and series projects in China.

• No plans for sizable plant closures in Europe; focus remains on operational adjustments and right-sizing.

• Portfolio decisions will prioritize future technologies and product extensions rather than exiting current segments.

• Further balancing of global business to drive growth outside Europe.