Cooper-Standard Holdings Inc. Business Report FY ended Dec. 2019
Financial Overview |
(in million USD) |
| FY ended Dec. 31, 2019 | FY ended Dec. 31, 2018 | Rate of change (%) | Factors | |
| Net Sales | 3,108.4 | 3,624.0 | (14.2) | 1) |
| Net Income | 62.2 | 99.1 | (37.2) | - |
| Sales by Geographic Area | ||||
| -North America | 1,641.7 | 1,924.7 | (14.7) | 2) |
| -Europe | 868.2 | 1,030.1 | (15.7) | 3) |
| -Asia Pacific | 504.0 | 571.2 | (11.8) | 4) |
| -South America | 94.5 | 98.1 | (3.6) | 5) |
Factors
1) Net Sales
-The Company’s sales for the fiscal year ended December 31, 2019 decreased by 14.2% from the previous year to USD 3,108.4 million. The decrease in sales were driven by a number of factors, including decreased sales volumes and product mix, the divestiture of the Company’s anti-vibration systems business, negative foreign currency translation effects and the negative impact resulting from the strike at GM during the year. These losses were partially offset by acquisitions made during the year.
2) North America sales
-Sales for the Company’s North America segment decreased by 14.7% in the fiscal year ended December 31, 2019 to USD 1,641.7 million. The decreased sales in North America were primarily due to decreased volumes and product mix, as well as the divestiture of the anti-vibration systems business. Foreign currency exchange effects also decreased sales in North America slightly.
3) Europe sales
-Sales in the Europe segment in the fiscal year ended December 31, 2019 totaled USD 868.2 million, a decrease of 15.7% from the previous year. The combined effect of decreased sales volumes, negative foreign currency translation effects and the divestiture of the anti-vibration systems business caused the decrease in sales.
4) Asia Pacific sales
-The Company’s Asia Pacific segment had sales of USD 504.0 million in the fiscal year ended December 31, 2019, decreasing 11.8% from the previous year. The segment’s had a net increase in sales from acquisitions and divestitures. However, this was offset by decreased sales from decreased volumes and negative foreign currency exchange effects.
5) South America sales
-The South America segment’s sales decreased by 3.6% in the fiscal year ended December 31, 2019 to USD 94.5 million. While the segment had increased in sales due to improved volumes and product mix, negative foreign currency exchange effects offset those gains.
Restructuring
-The Company has completed the divestiture of its anti-vibration systems (AVS) business to Continental AG. The total sale price of the transaction was USD 265.5 million, subject to certain adjustments. The divested AVS business has approximately 1,000 employees and offers a comprehensive portfolio of anti-vibration systems, technologies and products to automotive OEMs that mitigate vehicle NVH (noise, vibration and harshness), and enhance ride and handling. The Company will work closely with Continental AG to ensure a smooth transition for all stakeholders. (From a press release on April 1, 2019)
-Continental received unconditional approval from all relevant antitrust authorities for the acquisition of the Anti-Vibration Systems (AVS) business of the Company. Continental will close the acquisition of the Company’s AVS business as planned in the first half of the year. The acquisition of the AVS business was agreed on November 1, 2018. The Company’s AVS unit runs five production sites including R&D facilities in Canada, France, India and the U.S. and has a workforce of approximately 1,000 employees. The AVS business brings extensive expertise in vibration control technology and sound insulation and will enhance Continental’s capabilities in these fields. The unit develops global anti-vibration solutions that mitigate noise, vibration and harshness in vehicles and thus improve suspension comfort and handling. (From a press release on March 5, 2019)
Contracts
-The Company announced that it will supply the 2020 Ford Explorer with various sealing and fluid transfer systems. These will include a static sealing system utilizing the Company’s Fortrex material, engine cooling hose assemblies with e-motor and battery cooling systems; and transmission oil cooler hose assemblies. (From a press release on January 14, 2019)
Awards
-General Motors awarded the Company with a GM Supplier of the Year award during its awards ceremony held on May 15, 2019. This marks the second consecutive year in which the Company has received the award. The award is given based on criteria in product purchasing, global purchasing and manufacturing services, customer care and aftersales, and logistics. (From a press release on May 17, 2019)
-The Company received the Smart Pillar World Excellence Award from Ford during the 21st annual Ford World Excellence Awards. The Company received the award for its Fortrex sealing product. (From a press release on May 30, 2019)
Outlook
-The Company expects that its net sales in the fiscal year ending December 31, 2020 will be between USD 2.85 billion and USD 3.05 billion.
R&D Expenditures |
(in million USD) |
| FY ended Dec. 31, 2019 | FY ended Dec. 31, 2018 | FY ended Dec. 31, 2017 | |
| Overall | 114.9 | 122.5 | 128.0 |
| % of sales | 3.7 | 3.4 | 3.5 |
R&D Facilities
-As of December 31, 2019, the Company has 14 research and development facilities across the world.
Product Development
Recent technologies related to advanced materials, processing and weight reduction
-In recent years, the Company has realized several technologies related to advanced materials, processing and weight reduction. These technologies include ForTrex, a material platform that provides reduced weight while improving performance and aesthetics; FlushSeal, a integrated solution for frame under glass static sealing systems that improve aerodynamics, NVH and reduce weight; MagAlloy, a processing technology to develop material for brake lines that provides increased long-term durability through improved corrosion resistance; and ArmorHose, a material which enables more durable coolant hoses and removes the necessity for abrasion sleeves on under-hood hose assemblies.
AI-enhanced development cycle for materials
-The Company employs an AI-enhanced development cycle for polymers that has reduced material development times while enabling discovery of new compounds that provide improved characteristics.
Capital Expenditure |
(in million USD) |
| FY ended Dec. 31, 2019 | FY ended Dec. 31, 2018 | FY ended Dec. 31, 2017 | |
| North America | 65.4 | 72.5 | 67.3 |
| Europe | 35.7 | 53.5 | 45.9 |
| Asia Pacific | 40.2 | 70.7 | 51.2 |
| South America | 7.3 | 5.7 | 4.9 |
| Corporate | 15.9 | 15.7 | 17.5 |
| Total | 164.5 | 218.1 | 186.8 |
-In the fiscal year ending December 31, 2020, the Company expects to invest between USD 140 million and USD 150 million in capital expenditures.
Investments outside U.S.
<Mexico>
-The Company inaugurated its second plant in Aguascalientes, in a development located in the FINSA industrial park. The Company invested USD 15 million to the plant and will generate 100 new jobs. In this plant, polymer mixing technology is used to provide seals and rubber packaging for the automotive industry. The Company's first plant in the state is the largest of its 124 plants in the world, producing approximately 73,000 units, with 200 unique part numbers, on a daily basis for customers such as Ford, Volkswagen, Nissan, GM, and FCA, among others. (Mexico-Now article on May 22, 2019)
-The Company’s USD 15 million expansion project was announced for its plant that in Aguascalientes, Mexico, in the San Francisco Industrial Park. The plant currently exports products to 21 countries, which consist of fuel and brake lines, and fluid transfer hoses. (Mexico-Now article on April 15, 2019)