Annual Report and Accounts and AGM

TI Fluid Systems PLC
04 April 2024
 

4 April 2024

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TI Fluid Systems plc

(the "Company")

 

Annual Report and Accounts 2023, Sustainability Report 2023, and Annual General Meeting 2024

The Company announces that today it has released the below listed documents: 

 

·    Annual Report and Accounts for the financial year ended 31 December 2023 ('Annual Report and Accounts 2023')

·    Sustainability Report for 2023

·    Notice of the Annual General Meeting 2024 ('AGM')

·    Form of Proxy for the AGM

 

In accordance with Listing Rule 9.6.1, the Annual Report and Accounts 2023 and AGM documents have been submitted to the National Storage Mechanism and will shortly be available for inspection at the National Storage Mechanism ('NSM') https://data.fca.org.uk/#/nsm/nationalstoragemechanism and on the Company's website at www.tifluidsystems.com.

 

The AGM is scheduled to be held at 9 am on Tuesday 14 May 2024 at the offices of Latham & Watkins (London) LLP, 99 Bishopsgate, London EC2M 3XF. Shareholder registration will be available from 8.30 am. 

 

As announced on 12 March 2024, the Board intends to recommend a final dividend of 4.53 Euro cents per share amounting to €23.2 million. Subject to shareholder approval at the AGM on 14 May 2024, the final dividend will be paid on 21 June 2024 to those on the register at the close of business on 24 May 2024, the Dividend Record Date, and will be converted to Sterling at a fixed rate on the same day. 

 

Enquiries:

TI Fluid Systems plc

Kellie McAvoy

Investor Relations

Tel: +44 7354 846374

 

Headland Consultancy

Matt Denham/Chloe Francklin

Tel: +44 (0)20 3805 4822

 

About TI Fluid Systems plc

TI Fluid Systems is a global innovator of thermal and fluid system solutions for the full range of current and developing vehicle architectures. Serving all major automotive manufacturers, with more than 100 years of automotive supply experience; TI Fluid Systems operates across 27 countries with a commitment to improving efficiency, performance and sustainability worldwide. To find out more about TI Fluid Systems, visit www.tifluidsystems.com.

 

Appendix

The information below, which is extracted from the Annual Report and Accounts 2023, is included solely for the purpose of complying with DTR 6.3.5 and the requirements it imposes on issuers as to how to make public annual financial reports. It should be read in conjunction with the Company's preliminary results announcement released on 12 March 2024. This announcement is not a substitute for reading the full Annual Report and Accounts 2023. Page, note and section references in the text below refer to page numbers, note and section references in the Annual Report and Accounts 2023.

 

Statement of Directors' responsibilities in respect of the financial statements

 

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law and regulation.

Company law requires the directors to prepare financial statements for each financial year. Under that law, the Directors have prepared the Group financial statements in accordance with UK-adopted international accounting standards and the parent Company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 'Reduced Disclosure Framework', and applicable law).

Under Company law, Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and parent Company and of the profit or loss of the Group for that period. In preparing the financial statements, the Directors are required to:

•    select suitable accounting policies and then apply them consistently

•    state whether applicable UK-adopted international accounting standards have been followed for the Group financial statements and United Kingdom Accounting Standards, comprising FRS 101 have been followed for the parent Company financial statements, subject to any material departures disclosed and explained in the financial statements

•    make judgements and accounting estimates that are reasonable and prudent

•    prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and parent Company will continue in business

The Directors are responsible for safeguarding the assets of the Group and parent Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are also responsible for keeping adequate accounting records that are sufficient to show and explain the Group's and parent Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and parent Company and enable them to ensure that the financial statements and the Directors' Remuneration report comply with the Companies Act 2006.

The Directors are responsible for the maintenance and integrity of the information included on the parent Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Directors' confirmations

The Directors consider that the Annual Report and accounts, taken as a whole, is fair, balanced and understandable and provides the information necessary for shareholders to assess the Group's and parent Company's position and performance, business model and strategy.

Each of the Directors, whose names and functions are listed in the Board of Directors section of this report, confirm that, to the best of their knowledge:

•    the Group financial statements, which have been prepared in accordance with UK-adopted international accounting standards, give a true and fair view of the assets, liabilities, financial position and profit of the Group

•    the parent Company financial statements, which have been prepared in accordance with United Kingdom Accounting Standards, comprising FRS 101, give a true and fair view of the assets, liabilities and financial position of the parent Company

•    the Strategic report includes a fair review of the development and performance of the business and the position of the Group and parent Company, together with a description of the principal risks and uncertainties that it faces

This responsibility statement was approved by the Board of Directors on 11 March 2024 and is signed on its behalf:

By order of the Board

Hans Dieltjens, Chief Executive Officer and President

Alexander De Bock, Chief Financial Officer

 

Principal risks and uncertainties 

Operating in an increasingly risky and uncertain environment, the Group's global operations continue to be exposed to a number of risks, which could, either on their own, or in combination with others, have an adverse impact on the Group's results, strategy, business performance and reputation, which, in turn, could impact upon shareholder returns and the wider stakeholders. The following section highlights the most significant risks that may affect the Group's ability to deliver the strategy, as set out on pages 20-21.

The management and mitigation strategy, described in the principal risks section below, seeks to reduce the impact or likelihood of a major risk occurring. The Board also recognises there could be risks that may be unknown, or that may be judged to be insignificant at present but may later prove to be significant.

2023 has seen a confluence of significant challenges that threaten to disrupt the macro environment. These challenges are multifaceted, stemming from a complex interplay of global and geopolitical events, economic headwinds, and technological shifts. These, which include the ongoing war in Ukraine and other geopolitical events, continuing supply chain challenges, and evolution in the trends of electrification, have created a volatile and uncertain environment for the automotive ecosystem. Navigating inflationary pressures, resource shortages, and evolving dynamics amongst the market players further complicates the landscape.

The recent conflict in the Middle East reinforces the increasing prominence of risk relating to geopolitical tensions and its increasing potential impact on the global economy. The growing economic and trade tensions between countries could also have significant ramifications for the automotive industry in relation to access to market, supply chain and regulatory environment.

The risk of economic challenges, and even slowdown in major economies, will have a direct impact on demand for vehicles, putting pressure on automotive manufacturers and suppliers alike. 2023 has seen the changes in economic environment of China impacting many sectors. Continuing regulatory change further complicates the risk landscape, and is now a business constant that arises across all aspects of the environmental, social and governance spectrum.

The automotive supplier industry faces a complex and challenging landscape in 2024, whilst the increasing demand for electrified vehicles and the growing adoption of advanced technologies such as autonomous driving and connectivity offer significant growth potential. Navigating this uncertain landscape will require agility, resilience, and a clear strategic vision in order to adapt to changing market conditions and new technologies.

The Group remains vigilant to development in the macro environment, and the management of resilience (such as our liquidity and pivoting to electrification) is an important focus area during this time of heightening volatility and uncertainty. With significant inflationary pressure across all aspects of our operations, our ability to manage the impact of cost increases, and to recover through pricing and efficiency, is critical. Furthermore, climate change continues to drive the pace and potential severity of many of the principal risks that are already being managed. Specifically, climate change affects our technology and product-development risk as vehicle electrification continues across the industry, broadening our business continuity risk as we seek to transition to lower-carbon, more efficient manufacturing operations and address physical risks to our facilities. As we respond by actioning our Taking-the-Turn strategy, our technological agility to develop and adapt our product offerings to meet the EV requirements of our customers is critical. Vehicle electrification also results in a significant impact on human resource management, as we need to ensure that the Group has sufficient human resources with the appropriate skillset, such as product design and development.

Emerging risks

In the environment of fast-paced changes in the risk landscape, the Board recognises that an essential part of risk management is the ability to monitor and respond to new and emerging risks. Alongside the principal risks, emerging risks are identified and considered by the Board and the ERC.

As the Board continues to review and refine the Group's approach to vehicle electrification, operational sustainability and talent development (all of which are embodied in the Taking-the-Turn strategy) it has been conscious of developments in strategic risks that may need to be considered, in addition to those already identified as principal risks. For example, if the Group chooses to address the need to enhance the Group's product capabilities other than organically (for instance through significant mergers and acquisitions or joint venture arrangements), this may necessitate additional resources and expertise, and would naturally entail risks relating to management, execution and value delivery.

The Board remains acutely aware of the changing market dynamics that will continue to arise from climate change and the growing demand for EVs. The Board feels that the Taking-the-Turn strategy will position the Group well to respond positively to these market changes. The main direct impact of climate change is incorporated within the principal risks, particularly the impact of climate change regulation leading to electrification, and increasing complexity of reporting requirements. However, it is recognised that increased frequency of future climate-related risk events (severe storms, floods, rising sea levels, etc.), and the transition to a low carbon economy, may also adversely impact asset values and financial performance over time and, as such, will continue to be monitored and mitigated where practical to do so. Conversely the potential for delays in regulatory changes mandating electrification of vehicles may extend the timelines for return on investments in new technology, but expand opportunities for conventional ICE vehicles.

Climate change and sustainability issues also prompted increasing levels of regulations and requirements, especially for listed companies. The use of plastic within the Group's operation and increasing trend towards sustainable supply chains are likely to become an area of increasing focus that will be addressed as part of the Group's sustainability strategy.

The potential for further disruptive technologies, which may impact demand for our products, trends toward in-housing of supply chain by customers and the increasing global share of Chinese car manufacturers, may pose challenges as well as opportunities for maintaining or deepening market penetration.

Management is cognisant of the potential impact generative artificial intelligence may have on the labour force, as well as the need for enhanced governance within operations and the IT infrastructure with regards to protection of data, information and intellectual property.

Furthermore, with the challenging economic climate, the higher cost of financing and the degree of investment in technology required to meet market demand, management is carefully managing liquidity and monitoring changes in refinancing requirements. The Group currently has a strong level of liquidity and resilience in terms of long-term viability.

In the light of the process undertaken, the Board is satisfied that the current year risk assessment has been sufficiently robust, and is of the view that other than those reported on pages 42-55 of the Annual Report and Accounts, there are no distinct risks that are material to the Group at the date of this report.

 

Related Party Transactions

 

Related party transactions

At 31 December 2023, there is no ultimate controlling party of TI Fluid Systems plc.

Transactions with Group companies

Balances and transactions between Group companies have been eliminated on consolidation, and are not disclosed in this Note except for subsidiaries that are not wholly owned. Transactions with those companies are made on the Group's standard terms of trade.

The Group holds 97% of the shares in Bundy India Ltd. At 31 December 2023, Bundy India Ltd had trade and loan receivables net of payables to other Group undertakings amounting to €1.9 million (2022: €4.3 million) and made sales within the Group during the year of €2.6 million (2022: €3.3 million).

Transactions with related parties

Alfmeier Prazision SE is an existing supplier of the Group and was acquired by Gentherm Incorporated during the year 2022, a company in which Mr R Hundzinski is a director. For the period for which Gentherm Incorporated was a related party, the Group purchased goods amounting to €4.3 million (2022: €4.9 million). These goods were purchased on an arm's length basis.

During the year, Bain Capital, a significant shareholder of the Company, charged the Company €0.02 million (2022: €0.8 million), which related to passed through costs from a third-party provider.

No related party balances were outstanding at the year end (2022: €0.8 million).

END

 

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