Dear friends of CIE Automotive:
It is our pleasure to introduce CIE Automotive’s Annual Report for 2023, a year in which we feel like we made a real difference and helped transform the world through our work. The following pages explain how we took decisions and how we embarked on pathways that not only served to consolidate our financial success but also impacted the people and organisations around us and will ultimately benefit society and the planet in the long term.
We are living in challenging times: the sector is faced with making heavy investments to decarbonise vehicles and increase their connectivity and comfort; it is being drawn into a price war in the electric vehicle segment; and inflation and higher costs are putting pressure on our earnings. There are also, however, encouraging signs that we are on the cusp of a new automotive cycle. Ageing vehicle fleets around the world, low penetration in emerging economies, and growing sensitivity around more environmentally-friendly cars are some of the most promising factors.
Despite this uncertain climate, with its highlights and lowlights, in 2023 we once again marked new records in revenue, profitability and cash generation. We posted a net profit of €320.2 million, growth of 6.7% from 2022. Our bottom line was driven by topline growth of 3.1% to €3.96 billion and a stronger performance across all our markets, lifting the group’s EBITDA to €713.2 million, implying a margin of 18.0%. We converted €447.4 million of that EBITDA into cash flow and brought our net debt down to €1.13 billion. In parallel, we paid our shareholders over €100 million, so delivering our commitment to paying out one-third of our net profit in dividends.
As you can see, these are truly extraordinary numbers, especially considering the environment, which is why we want to thank and congratulate the entire CIE Automotive team for making them possible.
We are optimistic about the future. We are ready to take advantage of the opportunities thrown up by the current market trends to surmount the challenges looming and continue to generate value for our shareholders, both through dividend payments and share price gains, as we have been doing for over 25 years.
In 2023 we once again marked new records in revenue, profitability and cash generation.
We posted a net profit of €320.2 million, growth of 6.7% from 2022
To do that, we have a unique business model, which has proven its worth in very tough times, articulated around six pillars: multiple locations, customer diversification, a multi-technology approach, disciplined investing, decentralised management and embedded sustainability standards. A model that will allow us to meet the ambitious targets set down in our 2025 Strategic Plan, which position us among the three most profitable automotive parts makers.
With that in mind, in 2023 we redirected our financial and managerial resources to the businesses and markets offering most growth potential and highest returns. We acquired Iber-Oleff Brasil in a transaction that has reinforced our position in a growth market and allowed us to diversify our local customer base, and we sold our German forging factories specialised in the European truck market.
Financial returns are not, however, our only ambition. Throughout last year we met all our compliance requirements and continued to engage all our professionals in the task of embedding ESG matters into our day-to-day operations. As signatories of the United Nations Global Compact, we aspire to contribute to delivery of the Sustainable Development Goals contemplated in the Agenda 2030 to end poverty, protect the planet and ensure that everyone can live in peace and prosperity. We are well aware that with 10 R&D centers and 108 plants in 17 countries, we are in a privileged position to do that.
Our 25,274 employees at year-end 2023 are both architects and beneficiaries of our transformation process. It is thanks to their dedication that we were able to continue to grow in 2023, generate wealth and mobilise other people so that they too become agents of change. In exchange, we provided them with €35 million worth of support measures (health insurance, food, transportation, etc.) and offered them as safe, stimulating and fair a place to work as possible, regardless of where they carry out their work.
We lifted the percentage of women in our workforce by two points and by year-end had completed diversity and inclusion assessments at 93% of our factories, generating action plans for including people of different cultures, genders, generations and abilities. This is a particularly important milestone in countries whose populations are not sensitive to these matters and where there is no legislation around them.
Our responsible doings have a domino effect on the supply chain: In 2023, we renewed our ISO 20400 Sustainable Procurement certification and rolled out our Supply Chain Race 2 Zero programme
Our responsible doings have a domino effect on our supply chain. In 2023, we renewed our ISO 20400 Sustainable Procurement certification and rolled out Supply Chain Race 2 Zero, our project for rallying our worldwide suppliers around our goal of being net zero by no later than 2050, offering them resources, guidance and environmental training. This initiative is part of our new environmental roadmap which echoes and expands on the targets set in our 2025 Strategic Plan and establishes new steps towards climate neutrality.
Last year we accompanied our customers with their efforts to decarbonise transport by investing in technology projects aimed at reducing the weight of our parts and improving material circularity. We also participated in a number of research programmes related with the electrification of transport, including Basquevolt, the Basque alliance for the creation of solid-state lithium batteries.
All these activities favour progress in society and development in our business communities, which we supported in 2023 by contributing €497 million of tax and participating in community projects that benefitted over 41,500 people, projects we are certain will have a multiplier effect in the long term.
In 2023 we demonstrated that the future is not preordained, that it is our actions that mark the difference. We know that much remains to be done to create the fair, prosperous and sustainable world we all long for but we are convinced that we are taking steps in the right direction and that is something we are proud of.
Thanks to all for your support,