October 25, 2018 / 11:00 AM / a year ago

UPDATE 2-Veoneer delays sales, margin goals as autos gloom spreads

* Carmaker customers hit by regulations, China slowdown

* Delays 2020 operating margin target by 1 to 2 years

* Says unlikely to hit $3 bln sales target for 2020

* Forecasts worse full-year drop in underlying sales

* Shares fall as much as 20 percent (Adds CEO, analyst comment, details, updates shares)

By Esha Vaish and Johannes Hellstrom

STOCKHOLM, Oct 25 (Reuters) - Swedish autos supplier Veoneer pushed back its sales and margin targets on Thursday, blaming production delays at customers struggling with tougher regulations and faltering demand.

Stockholm-listed shares in the company, which split from Autoliv earlier this year, plunged as much as 20 percent to trade below their July debut price, as it joined a string of recent warnings from the auto industry.

Several carmakers have cut financial guidance as new emissions rules have delayed vehicle sales in Europe and economic growth in China, the world’s biggest auto market, has slowed to its weakest quarterly pace since 2009.

These have included Daimler and Hyundai , which together accounted for 29 percent of Veoneer’s total sales in 2017, making them its second and third largest customers respectively.

The industry gloom has hit other auto suppliers too.

Veoneer, which focuses on high-tech safety gear aimed at self-driving cars, said it now expected to achieve an operating margin of 0-5 percent one to two years later than its original target of 2020, adding it would also have to spend more than expected on research and development.

The company also said it was unlikely to reach its $3 billion sales target for 2020. Chief Executive Jan Carlson told analysts it would be “fair to guess” the target would be achieved sometime during 2021.

Veoneer said interest and orders for its radar products, vision systems and advanced driver assistance software had been rising, evidenced by a new contract to supply robo-taxis from a undisclosed major global manufacturer.

Generally it takes as long as three years to book revenues against orders, but the company said this was being further delayed due to slow ramp-ups in car production.

Handelsbanken analyst Hampus Engellau said Veoneer was also likely facing some pain as customers such as Daimler, Geely and BMW were not able to export as much from the United States to China due to new tariffs.

In 2017, Daimler accounted for 17 percent of Veoneer’s sales, according to the Swedish firm’s IPO prospectus. It did give figures for Geely and BMW.

Veoneer previously said the phase-out of some contracts would result in a 3 percent fall in underlying sales this year.

It downgraded that forecast on Thursday to a 5 percent fall, blaming a near-term slowdown in light vehicle production.

At 1310 GMT, Veoneer’s Swedish shares were down 17 percent at 304 Swedish crowns. (Reporting by Esha Vaish and Johannes Hellstrom in Stockholm; Editing by Niklas Pollard and Mark Potter)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below