In 2021 we marked 25 years building the dream that began in 1996, when a group of investors came up with the idea of creating a Spanish industrial conglomerate in the automotive service industry. A dream we have been forging over the years with the integration or more than 100 companies and the construction of new factories to yield what is today a global and multi-technology group with close to 25,000 employees across 18 countries and a market cap of €3.5 billion. As we look back on the road taken, we feel tremendous pride, but also fresh ambition. Our minds and efforts remain fixed on the road ahead. Throughout the pages of this year’s Annual Report we want to tell you about CIE Automotive’s new dreams and how we worked in 2021 to achieve them.
CIE Automotive turned a new page in 2021 with the publication of its new 2025 Strategic Plan. That plan is our response to the profound and dizzying transformation taking hold in society and the automotive industry, change that has also shifted our paradigm as a company, nudging us to reformulate our Mission, Vision and Values, among other things.
"We managed to unlock net profit growth of 44% to €267.5 million."
By executing our 2025 Strategic Plan, which we unveiled in June during our first Capital Markets Day, we strive to become a group that generates €1 billion of EBITDA and €500 million of net profit from 2025. To achieve our ambitions, we plan to work on matters such as vehicle electrification and comfort, on the implementation of Industry 4.0 and on international expansion, without ever losing sight of the importance of cash generation that permits organic and M&A-led growth.
However, our aspirations go far beyond earnings metrics: we want to continue to zero in on excellence by definitively integrating environmental, social and governance (ESG) criteria into our management. Rest assured that these are not empty words or a list of good intentions. Our ESG Strategic Plan 2025, published last November, establishes close to 80 KPIs that will clearly and tangibly monitor the progress we make along the four key lines of initiative we have set for ourselves: CIE culture, ethical commitment, eco-efficiency and active listening.
Already in 2021 we took our first steps towards achieving all these milestones, in spite of the complexity of the prevailing environment.
Just when we thought we had seen it all with the onset of the pandemic in 2020, the sharp rebound in demand following the lockdowns sparked severe friction across global supply chains, raw material scarcity and inflation, a collapse in shipping and an escalation in energy prices in 2021. In the automotive industry, that situation was exacerbated by the shortage of chips, vital to making cars. As a result of all those malfunctions, vehicle production amounted to 77 million, up 3.4% from 2020 but way below the mark set in 2019, when the world made 89 million vehicles.
But nothing knocks CIE Automotive of course. Despite the weak sector growth, our (constant-currency) revenue growth was 12 points above that of the market, at €3.27 billion, and our net profit increased 44% to €267.5 million. That healthy performance was unlocked by a job well done by our teams in all our regions and drove our EBITDA and EBIT margins to 17.6% and 12.3%, respectively. Our most sincere thanks to all of the people who participated in this feat.
CIE Automotive’s outstanding results in the midst of the health and economic crisis evidence not only how hard we have worked but also highlight the merit of the strategy deployed, thanks to which cash from operations topped 65% of EBITDA and we deleveraged by €200 million. Above all, however, they confirm the solvency of a business model that has once again demonstrated its ability to tackle crises and come out the other end all the stronger.
Our customer diversification, across a broad range of original equipment makers (OEMs) and Tier-1 suppliers, enabled us to make up for the drop in demand from some customers with orders placed by others. Our mastery of different technologies made it possible to offer a range of solutions for a given part and to work in markets at different stages of vehicle electrification. Thanks to our global presence and local approach, we were able to offset the lethargy encountered in some markets by tapping into the greater dynamism observed in others, while at the same time benefitting from our proximity to local suppliers to overcome the global logistics issues, control costs, purchase high-quality services and side step the supply chain disruption. Our decentralised management enabled us to fine-tune our strategy for each region’s specific circumstances. And the integration of ESG standards has not only turned us into a more responsible company, it has left us better prepared to tackle the risks associated with consumers’ new sensitivities and made us more attractive to customers and investors.
"On the ESG front, it is worth highlighting the newly-created Diversity, Equality and Inclusion Committee; measurement of our environmental footprint in Europe, Mexico and Brazil; formulation of the first dedicated climate risk map; sustainability initiatives in the supply chain (92.3% of suppliers local); our first ever Capital Markets Day; and our tax contribution to society of €391 million."
Allow me, then, to name a few of our achievements on the ESG front, as signatories of the Global Compact and an organisation committed to the United Nations Sustainable Development Goals. We set up a Diversity, Equality and Inclusion Committee, with which we aim to create a stronger sense of belonging and inclusion on the part of everyone working at the group, no matter where in the world. We measured our corporate environmental footprint in Europe, Mexico and Brazil. We formulated the group’s first environmental risk map. We lifted the sustainability of our purchasing footprint, with 92.3% of our suppliers qualifying as local. We held our first ever Capital Markets Day, marking a fresh milestone in our thrust to make our strategy and management more transparent. And we contributed to society and its development by paying €391 million of tax contribution.
We would like to take advantage of this introduction to acknowledge the commitment of our entire team, of all the people whose daily efforts are making CIE a better place to work, who with their small gestures are helping to protect and improve our surroundings. We would also like to thank our customers for the trust they continue to place in us at this time of tremendous uncertainty, and our suppliers for their collaborative spirit and their readiness to align with our goal of making vehicles that are safer and more comfortable and efficient. Lastly, we would like to express our gratitude to our shareholders and investors, who were rewarded with a 24% share price gain this year. We believe, however, that the market has yet to price in our fantastic results and bright expectations.
We couldn’t possibly end this letter without a heartfelt mention of two people who left us in 2021: Goizalde Egaña, who was Vice-Chairwoman of our Board of Directors, and Amable Martínez-Conde, founder and honorary chairman of Autometal. Their legacy and example will remain an inspiration for us.
Thanks to everything we have learned from them, and from each and every one of the people who have participated in building the CIE Automotive dream in the last 25 years, we are feeling strong and ready to conquer the future. 2021 marked the start of CIE Automotive’s tomorrow. Come share it with us.