Automotive manufacturer Kongsberg Automotive has entered into an agreement with the Lear Corporation to sell nearly its entire vehicle interior and comfort business (interior comfort systems). The sale is made on a company basis for 175 million euros, equivalent to 1.7 billion kroner.
The company announced late Thursday evening, about seven hours before it presented its third-quarter results Friday morning.
The result shows a loss of 1.5 million euros before taxes out of total sales of 267 million euros. In the same period last year, profit before tax was 0.6 million euros on a turnover of 255 million euros.
Kongsberg Automotive’s share rose about 16 percent in the Oslo Stock Exchange on Friday afternoon, and about 13.30 was the share that clearly rose on the stock exchange.
Sharpen the wallet
Car Interiors provides interior systems for all major auto manufacturers and seat manufacturers. The buyer, US-based Lear Corporation, has long been a partner of Kongsberg Automotive. When Americans now buy the interior design business, about 3,800 Kongsberg Automotive employees in Asia, Europe and North America will get a new employer.
According to Kongsberg Automotive, selling the company is part of the change the company is making as it will improve its product portfolio. In the future, the company will focus on couplings, fluid transmission systems, drivelines, chassis products and off-road vehicle equipment. The aim is to maintain and enhance competitiveness, cash flow and growth.
The transaction is expected to be completed in the first quarter of 2022.
CEO Joerg Buchheim (right) with Ivar C. Haug, Head of Powertrain and Chassis R&D (pointing). (Photo: Kongsberg Automotive)
Our portfolio decisions are driven by the clear strategy of building on market-leading positions in the business areas in which Kongsberg Automotive is involved. Going forward, we can fully use our most valuable resources in the businesses in which we excel, Kongsberg Automotive Senior Director Jörg Buchem says in a statement.
Cable works are also sold
Earlier on Thursday, the Norwegian automaker announced that it is also selling its Light Cable (LDC) business to India’s Suprajit Engineering.
The sale was made based on a company value of 37.7 million euros, equivalent to 367 million Norwegian kroner.
LDC produces mechanical and electromechanical cables.
The quarterly report states that the two companies together have an annual turnover of 320 million euros.
Satisfaction of a major shareholder
Wreath cake baker Arild Vigen Christoffersen is pleased with the news from Kongsberg Automotive.
DN previously mentioned how he and his wife, Carrie Louise Vigen Christoffersen, invested nearly their entire stock exchange portfolio in Kongsberg Automotive. Together, they own about 1.4 percent of the stock in the company. The wreath cake baker first appeared on the contributor list in August of last year and gradually bought up. So is his wife.
Kongsberg Automotive completed an impressive makeover last year. The third quarter report for the fourth time in a row shows a very positive report with good results and not the least growth in liquidity, he tells DN.
With the sharp rise in price on Friday, the pair had become richer on paper by more than five million kroner by 13:30, and they now have shares worth more than 40 million kronor.
Since Christoffersen first appeared in the lists of shareholders, the stake has increased by nearly 80 percent.
– The mode of transport and raw materials is not specific to Kongsberg Autmotive, but applies to all types of companies, as well as to Kransekakebakeren. It’s about how to handle situations like this, and it’s there that Jörg Buchheim with his new management has shown an impressive ability to take action. In addition, Buchheim has gained valuable experience related to product development, innovation and sustainability, says the flower cake baker.
Christoffersen describes selling interiors as very good news, and notes that this segment only contributed to sales turnover, but not profitability.
He believes the sale means Kongsberg Automotive remains with a cash balance that offers many exciting opportunities. He hopes the company will take the opportunity to adjust its debt, buy back stock, and continue investing in innovations in electric cars and electric trucks.
In its quarterly presentation Friday, management said it is looking at several possibilities for what to do with the money from the sale. Among other things, a debt ratio reduction was highlighted as an alternative.
Christoffersen notes that Kongsberg Automotive will have about three billion in cash after the sale, and even after Friday’s price increase, the company’s market value is somewhat lower than that.
Kongsberg Automotive will wait to direct 2022, but I’m sure it will be the best year ever for the company, says the cake baker.
The most affected interior
Kongsberg Automotive, like the rest of the auto industry, has been hit by the supply crunch unfolding in global markets as a result of a lack of sufficient components and semiconductors.
A little over a month ago, Kongsberg Automotive announced that it was withdrawing its guidance for this year.
- Revenue is now forecast at 1.1 billion euros, up from 1.13 billion euros previously.
- Adjusted operating profit is expected to be 50 million euros, compared to the previous 60 million euros.
“The revised target numbers reflect the company’s expectations that the semiconductor shortage, combined with higher raw material prices, will continue to reduce auto manufacturers’ production, and that this will continue through the fourth quarter of 2021,” Kongsberg Automotive forecasts in 2021. Sept. .
The message itself is highlighted in the quarterly report. It also states that the interior design business is the area of business most affected.
This year, Kongsberg Automotive fell about 22 percent on the Oslo Stock Exchange. If you look back three years, the share is down more than 80 percent. Kongsberg Automotive’s market capitalization is NOK 2.9 billion.(Terms)Copyright Dagens Næringsliv AS and/or our suppliers. We want you to share our cases using a link that leads directly to our pages. All or part of the Content may not be copied or otherwise used with written permission or as permitted by law. For additional terms look here.
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