Eaton Corporation plc 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 | |
| Overall | ||||
| Net Sales | 21,390 | 21,609 | (1.0) | 1) |
| Operating Profit | 3,675 | 3,630 | 1.2 | - |
| Vehicle segment | ||||
| Sales | 3,038 | 3,489 | (12.9) | 2) |
| Operating Profit | 460 | 611 | (24.7) | |
| eMobility segment | ||||
| Sales | 321 | 320 | 0.3 | 3) |
| Operating Profit | 17 | 44 | (61.4) | |
Factors
1) Net Sales
-In the fiscal year ended December 31, 2019, the Company’s net sales decreased by 1.0% to USD 21,390 million. During 2019, the Company’s results of operations were impacted by negative currency translation and weaker than expected growth in the Company’s end markets, particularly in the second half of 2019.
2) Vehicle segment sales
-Sales in the Vehicle segment for the fiscal year ended December 31, 2019 totaled USD 3,038 million, a decrease of 12.9% over the previous year. The segment’s decrease in organic sales in 2019 was primarily driven by weakness in global light vehicle markets and revenues transferring over to the Eaton Cummins Automated Transmission Technologies joint venture.
3) eMobility segment sales
-Sales in the eMobility segment for the fiscal year ended December 31, 2019 were USD 321 million.Net sales were flat in 2019 compared to 2018 due to an increase in organic sales of 1%, offset by a decrease of 1% from the impact of negative currency translation. The increase in organic sales in 2019 was primarily due to growth in Europe.
Divestitures
-On December 31, 2019, the Company completed the sale of its Automotive Fluid Conveyance Division to Quantum Capital Partners. The Automotive Fluid Conveyance Division manufactures hydraulic power assisted steering, active ride systems, oil cooling, air conditioning and plastic components for the automotive industry. It employs approximately 1,300 people and has manufacturing facilities in the United Kingdom, Germany, the Czech Republic and China. (From a press release on January 2, 2020)
Business Partnership
-The Company announced that it has chosen global technology company KPIT to support the development of next-generation electrified mobility technologies for its eMobility business unit. The Company’s collaboration with KPIT initially will focus on developing and deploying technologies, software solutions and platforms for several components, including inverters, on-board chargers, DC-DC converters and power distribution modules. In March 2018, the Company announced the formation of its eMobility business unit for electrified vehicles. The eMobility business focuses on three primary areas for both automotive and commercial vehicle customers: intelligent power electronics, power systems, and advanced power distribution and circuit protection. The eMobility business focuses on three primary areas for both automotive and commercial vehicle customers: intelligent power electronics, power systems, and advanced power distribution and circuit protection. KPIT has proven expertise in embedded software, accelerators and stacks, such as AUTomotive Open System ARchitecture (AUTOSAR) and V2G, which enable faster implementation of technologies. (From a press release on August 13, 2019)
Contracts
Products for SuperTruck II program
-The Company announced it is contributing several components to truck manufacturers participating in the U.S. Department of Energy’s (DOE) SuperTruck II program. SuperTruck II is a USD 100 million partnership between the DOE, truck manufacturers and equipment suppliers seeking to improve freight efficiency more than 100% over an equivalent 2009 model, and improve engine brake thermal efficiency performance by 55%. The Company’s Vehicle Group offers include diesel cylinder deactivation, variable valve actuation, and its TVS exhaust gas recirculation pump, which is driven by an independent 48-volt electric motor. The Company has a new engine decompression brake and valvetrain technologies that include early exhaust valve opening, internal exhaust gas recirculation, and hydraulic lash adjuster technology. (From a press release on March 18, 2019)
Traction inverters for a battery-electric vehicle platform
-The Company's eMobility business was chosen by Nidec-PSA Emotors (Emotors), a joint venture between Nidec Leroy-Somer and Groupe PSA, to supply high-performance traction inverters for a battery-electric vehicle platform. The Company will provide its power-dense inverter to Emotors, which will integrate it with the motor and ship the finished system to its customers for assembly into the battery electric vehicle. The vehicle inverters feature a power density of 35 kW/L and 98% operating efficiency. The inverters can be used in all types of electric vehicles, and other alternative fuel types, such as hydrogen fuel cell vehicles. (From multiple sources on April 14, 2019)
10-speed UltraShift Plus MHD automated gearbox
-On September 26, VWCO announced that the Company supplies Volkswagen Constellation trucks with the 10-speed UltraShift Plus MHD automated gearbox. The gearbox is available in Constellation versions 17,280, 24,280 and 30,280 as well as with a high strength 395mm clutch. The new automated 10-speed gearbox was developed for the Brazilian market and can be applied to both road and vocational versions. Development for the VW Constellation was done in partnership between the Company’s local research and development center and VW’s engineering team. Benefits include speed and smoothness of shifting provided by automation. The shift system considers track inclination, vehicle load and engine torque and can skip up to two gears if conditions permit. The electronics also provide protection against clutch abuse and engine overspeed, and has a ramp start assist function, improving vehicle handling. The Constellation is built at VW’s plant in Resende, Brazil. (From multiple sources on September 26, 2019) (VWCO press release on September 26, 2019)
R&D Expenditures |
(in million USD) |
| FY ended Dec. 31, 2019 | FY ended Dec. 31, 2018 | FY ended Dec. 31, 2017 | |
| Overall | 606 | 584 | 584 |
Product Development
HCM1AV2 hHigh current power inductors
-The Company launched its automotive grade HCM1AV2 product line of high current power inductors for the transportation market to address increased power conversion and filtering requirements. The solution offers high current carrying capacity, high power density, low core losses and magnetic shielding to reduce EMI effects to other devices in the automotive engine compartment. The advanced construction and high-grade materials used in HCM1AV2 inductors are designed to withstand the effects of high temperature and high humidity environments found in many automotive electronic systems. (From a press release on August 14, 2019)
Capital Expenditure |
(in million USD) |
| FY ended Dec. 31, 2019 | FY ended Dec. 31, 2018 | FY ended Dec. 31, 2017 | |
| Overall | 587 | 565 | 520 |
| -Vehicle | 127 | 143 | 141 |
| -eMobility | 8 | 4 | 4 |
-The Company announced that it is investing USD 500 million over the next five years, through its eMobility business unit, for intelligent power electronics, power systems, and advanced power distribution and circuit protection technology. The eMobility business unit is part of the Company’s Vehicle Segment business group and was formed by combining products and manufacturing capabilities from the Company’s Electrical and Vehicle businesses. The Company has over 15 years of expertise in developing hybrid systems with more than 15,000 HEV and PHEV systems on the road in the U.S., Europe, China and other Asia-Pacific markets. The Company projects its current electrified portfolio will deliver approximately USD 300 million in revenue in 2018, with revenues of USD 2 to USD 4 billion expected by 2030. The eMobility business unit is headquartered in Southfield, Michigan, with design centers and manufacturing locations in Asia, Europe and the Americas. (From multiple sources on June 26, 2018)