Back

Auto supplier pulse check: Financial benchmarking of 100 global automotive suppliers

Date: 11/19/2013
Source: EY
• Investments in auto industry rebound globally, but especially in Asia
• Auto suplliers profitability is on a decreasing trend
• Suppliers reign in debt

Automotive suppliers are now steadily ramping up investments to capture growth as production volumes recover and the industry rebounds. Suppliers reduced capital spending in 2009 and 2010 in response to declining production volumes throughout the industry during the downturn.

During the past year, suppliers in Asian markets have invested in excess of the total group median, to keep pace with rapid technology advances and production volume increases in those markets.

In addition, companies under $1bn in revenue are also making investments to address key competitive priorities such as expanding product portfolios and geographic footprints in an effort to accelerate growth and support their global customer base.

EY’s Global Automotive Center has benchmarked 100 publicly traded global automotive suppliers to assess their performance and health. Suppliers profitability, as measured by EBITDA, has been modestly declining since 2010 as a result of the increased fixed costs of meeting rebounding production volumes as well as numerous program launches. EBITDA margins rebounded from the depths of the global recession in 2010 as suppliers benefited from significant variable margin on increased production volumes with substantially lower fixed costs than prior to the recession.

Suppliers reign in debt, however small cap suppliers witness increase in debt multiples driven by growing capital expenditure and working capital needs.

Increased leverage multiples (total debt/EBITDA) that resulted from declining profitability during the 2008 and 2009 downturn were quickly reversed during 2010 as earnings increased on the rapid rebound in production volumes.

Over the last three years, leverage multiples have remained relatively constant, despite generally increasing EBITDA levels, as suppliers have taken advantage of low interest rates and improved access to capital to recapitalize their balance sheets and maintain an efficient capital structure.

About the analysis:
Data was filtered and analyzed based on geographic region and company size. The comprehensive analysis includes over 35 financial metrics and considers data for the last 5+ year’s.

Region (based on headquarters location)
• North America: 30 suppliers with revenue ranging from $294m to $41.8bn
• Europe: 30 suppliers with revenue ranging from $110m to $43.0bn
• Asia: 30 suppliers with revenue ranging from $176m to $36.9bn
• Rest of World: 10 suppliers with revenue ranging from $100m to $1.3bn

Size (based on March 2013 LTM revenue)
• > $5bn: 25 suppliers
• $1bn to $5bn: 29 suppliers
• $350m to $1bn: 30 suppliers
• $100m to $350m: 16 suppliers
All data has been sourced directly from S&P Capital IQ.

****
About EY Romania
EY is one of the world's leading professional services firms with approximately 175,000 employees in 728 offices across 150 countries, and revenues of approximately $25.8 billion in 2013. Our network is the most integrated at global level and its vast resources allow us to help our clients benefit from every opportunity. In Romania, EY has been a leader on the professional services market since its set up in 1992. Our over 450 employees in Romania and Moldova provide seamless assurance, tax, transactions, and advisory services to clients ranging from multinationals to local companies. Our offices are based in Bucharest, Cluj-Napoca, Timisoara, Iasi and Chisinau. For more information, please visit www.ey.com.

Auto supplier pulse check: Financial benchmarking of 100 global automotive suppliers

• Investments in auto industry rebound globally, but especially in Asia
• Auto suplliers profitability is on a decreasing trend
• Suppliers reign in debt

Automotive suppliers are now steadily ramping up investments to capture growth as production volumes recover and the industry rebounds. Suppliers reduced capital spending in 2009 and 2010 in response to declining production volumes throughout the industry during the downturn.

During the past year, suppliers in Asian markets have invested in excess of the total group median, to keep pace with rapid technology advances and production volume increases in those markets.

In addition, companies under $1bn in revenue are also making investments to address key competitive priorities such as expanding product portfolios and geographic footprints in an effort to accelerate growth and support their global customer base.

EY’s Global Automotive Center has benchmarked 100 publicly traded global automotive suppliers to assess their performance and health. Suppliers profitability, as measured by EBITDA, has been modestly declining since 2010 as a result of the increased fixed costs of meeting rebounding production volumes as well as numerous program launches. EBITDA margins rebounded from the depths of the global recession in 2010 as suppliers benefited from significant variable margin on increased production volumes with substantially lower fixed costs than prior to the recession.

Suppliers reign in debt, however small cap suppliers witness increase in debt multiples driven by growing capital expenditure and working capital needs.

Increased leverage multiples (total debt/EBITDA) that resulted from declining profitability during the 2008 and 2009 downturn were quickly reversed during 2010 as earnings increased on the rapid rebound in production volumes.

Over the last three years, leverage multiples have remained relatively constant, despite generally increasing EBITDA levels, as suppliers have taken advantage of low interest rates and improved access to capital to recapitalize their balance sheets and maintain an efficient capital structure.

About the analysis:
Data was filtered and analyzed based on geographic region and company size. The comprehensive analysis includes over 35 financial metrics and considers data for the last 5+ year’s.

Region (based on headquarters location)
• North America: 30 suppliers with revenue ranging from $294m to $41.8bn
• Europe: 30 suppliers with revenue ranging from $110m to $43.0bn
• Asia: 30 suppliers with revenue ranging from $176m to $36.9bn
• Rest of World: 10 suppliers with revenue ranging from $100m to $1.3bn

Size (based on March 2013 LTM revenue)
• > $5bn: 25 suppliers
• $1bn to $5bn: 29 suppliers
• $350m to $1bn: 30 suppliers
• $100m to $350m: 16 suppliers
All data has been sourced directly from S&P Capital IQ.

****
About EY Romania
EY is one of the world's leading professional services firms with approximately 175,000 employees in 728 offices across 150 countries, and revenues of approximately $25.8 billion in 2013. Our network is the most integrated at global level and its vast resources allow us to help our clients benefit from every opportunity. In Romania, EY has been a leader on the professional services market since its set up in 1992. Our over 450 employees in Romania and Moldova provide seamless assurance, tax, transactions, and advisory services to clients ranging from multinationals to local companies. Our offices are based in Bucharest, Cluj-Napoca, Timisoara, Iasi and Chisinau. For more information, please visit www.ey.com.

Auto supplier pulse check: Financial benchmarking of 100 global automotive suppliers

• Investments in auto industry rebound globally, but especially in Asia
• Auto suplliers profitability is on a decreasing trend
• Suppliers reign in debt

Automotive suppliers are now steadily ramping up investments to capture growth as production volumes recover and the industry rebounds. Suppliers reduced capital spending in 2009 and 2010 in response to declining production volumes throughout the industry during the downturn.

During the past year, suppliers in Asian markets have invested in excess of the total group median, to keep pace with rapid technology advances and production volume increases in those markets.

In addition, companies under $1bn in revenue are also making investments to address key competitive priorities such as expanding product portfolios and geographic footprints in an effort to accelerate growth and support their global customer base.

EY’s Global Automotive Center has benchmarked 100 publicly traded global automotive suppliers to assess their performance and health. Suppliers profitability, as measured by EBITDA, has been modestly declining since 2010 as a result of the increased fixed costs of meeting rebounding production volumes as well as numerous program launches. EBITDA margins rebounded from the depths of the global recession in 2010 as suppliers benefited from significant variable margin on increased production volumes with substantially lower fixed costs than prior to the recession.

Suppliers reign in debt, however small cap suppliers witness increase in debt multiples driven by growing capital expenditure and working capital needs.

Increased leverage multiples (total debt/EBITDA) that resulted from declining profitability during the 2008 and 2009 downturn were quickly reversed during 2010 as earnings increased on the rapid rebound in production volumes.

Over the last three years, leverage multiples have remained relatively constant, despite generally increasing EBITDA levels, as suppliers have taken advantage of low interest rates and improved access to capital to recapitalize their balance sheets and maintain an efficient capital structure.

About the analysis:
Data was filtered and analyzed based on geographic region and company size. The comprehensive analysis includes over 35 financial metrics and considers data for the last 5+ year’s.

Region (based on headquarters location)
• North America: 30 suppliers with revenue ranging from $294m to $41.8bn
• Europe: 30 suppliers with revenue ranging from $110m to $43.0bn
• Asia: 30 suppliers with revenue ranging from $176m to $36.9bn
• Rest of World: 10 suppliers with revenue ranging from $100m to $1.3bn

Size (based on March 2013 LTM revenue)
• > $5bn: 25 suppliers
• $1bn to $5bn: 29 suppliers
• $350m to $1bn: 30 suppliers
• $100m to $350m: 16 suppliers
All data has been sourced directly from S&P Capital IQ.

****
About EY Romania
EY is one of the world's leading professional services firms with approximately 175,000 employees in 728 offices across 150 countries, and revenues of approximately $25.8 billion in 2013. Our network is the most integrated at global level and its vast resources allow us to help our clients benefit from every opportunity. In Romania, EY has been a leader on the professional services market since its set up in 1992. Our over 450 employees in Romania and Moldova provide seamless assurance, tax, transactions, and advisory services to clients ranging from multinationals to local companies. Our offices are based in Bucharest, Cluj-Napoca, Timisoara, Iasi and Chisinau. For more information, please visit www.ey.com.

Members & Partners about AmCham

Members 2 members

Member of the AmChams in Europe Network Member of the AmChams in Europe Network
Coalitia pentru Dezvoltarea Romaniei Coalitia pentru Dezvoltarea Romaniei
U.S. Business Visa Facilitation Program for AmCham Romania Members U.S. Business Visa Facilitation Program for AmCham Romania Members
U.S. Commercial Service U.S. Commercial Service