This article is transferred from: Gasgoo.com In 2020, affected by the new crown pneumonia epidemic, automobile production in major global markets, including China, Europe and the United States, will experience varying degrees of decline. In this context, the MAHLE Group has steadily responded to the impact of the epidemic with its strong adaptability, and has successfully realized the profitability of its main business.

　　MAHLE headquarters in Germany (Image source: MAHLE)

　　Sales in 2020 will reach 9.8 billion euros, and sales in China have bucked the trend and increased by 4% to a record high

　　In the second half of last year, the strong rebound of the market made up for the decline of the previous few months to a certain extent. MAHLE achieved sales revenue of about 9.8 billion euros for the whole year, down 16.7% year-on-year, and the global passenger car and commercial vehicle market was in the new crown epidemic. The average drop below is basically the same. The downturn in the global auto market has caused MAHLE’s business to fall sharply in almost all regions, but MAHLE has set a new sales record in China. After excluding the adverse effects of the exchange rate, sales in China increased by nearly 4% year-on-year to 1.3 billion euros.

　　Excluding restructuring related expenses, Mahler's profit before interest and taxes reached 155 million euros. This figure shows that MAHLE succeeded in limiting the impact of the sharp decline in sales on business results. "We have taken all possible measures to reduce the negative impact of the new crown epidemic on the company's profitability and liquidity. When demand weakened, we promptly adjusted the cost structure." Acting Chairman and Chief Financial Officer of the MAHLE Group Management Board Michael Frick said.

　　As expected, many factors such as the new crown epidemic, currency exchange rates, and sales decline caused by market weakness have affected the operating results. Overall, the MAHLE Group has a net loss of 434 million euros in 2020, most of which are caused by special effects, such as the high accumulated costs of necessary restructuring measures. In addition, research and development expenses are included in the final operating results of the group as usual.

　　Despite the decline in sales, MAHLE still obtained sufficient operating cash flow. Compared with the previous year, the figure increased from 514 million euros to 877 million euros. On December 31, 2020, cash on hand was 871 million euros, far exceeding the 567 million euros in the same period in 2019.

　　Therefore, starting from July 2020, the group’s net debt has continued to decrease. The balance sheet at the end of the year showed a net debt of 925 million euros, which was an impressive 31% drop from the previous year. As of the end of March this year, the amount of debt is still further decreasing.

　　Michael Frick said: "MAHLE is a healthy development company with a solid financial foundation. Although 2020 is a special year, we have a clear goal throughout the year and a steady pace. Even in the face of the new crown epidemic, we still have sufficient cash flow. , Reduced debt and achieved profitability at the business level."

　　Maintain high R&D investment, focus on hydrogen energy and electric mobility

　　Despite the challenging market environment, MAHLE has maintained a high level of R&D investment across the group in 2020, reaching 644 million euros, increasing its share of sales from 6.2% to 6.6%. More than 80% of them are used in future-oriented fields, and this proportion is still rising. In 2020, the MAHLE Group has laid a solid foundation for the expansion of its product portfolio and R&D capabilities, with hydrogen energy and electric mobility being the focus of it.

　　In 2020, the MAHLE Group has developed two standardized air filtration solutions for fuel cells. Through this brand-new modular concept, development time and cost are greatly saved, which provides great convenience for the mass production of fuel cell technology.

　　In another key future field-electric mobility, MAHLE provided technical support for the rapid charging of electric vehicles and hybrid vehicles' power batteries last year. The newly-developed high-performance condenser makes electric vehicles more suitable for daily use and thus easier to be accepted by the mass market. In addition, the MAHLE electric bicycle division has launched a new generation of electric bicycle drive systems, and this business is expected to achieve double-digit growth in the next few years. In Kornwestheim near Stuttgart, a new global R&D center for automotive electronics and mechatronics has been erected; in Fellbach, a brand new one for the development and testing of electric bridges and drive units for electric vehicles The test bench has also been put into use.

　　"As a technology-oriented modern enterprise, MAHLE is deeply trusted by customers and has an endless stream of orders. In the field of new energy applications, we have won orders including drive motors for passenger cars and two-wheeled vehicles, and power electronics. Devices, battery cooling systems, electric compressors and electronic water pumps, etc.; in the traditional business areas, customers still have strong demand for internal combustion engine parts." Michael Frick revealed.

　　Adjust the group structure and adopt all-round cost reduction measures

　　In 2020, the MAHLE Group has intensified its structural adjustment and cost reduction measures. In view of the historical changes that are taking place in the industry and the weakness of the global auto market, MAHLE regards technical and architectural repositioning as its goal in the next few years.

　　The adjustment of human resource allocation is part of the group's restructuring measures. All measures are implemented in a responsible manner after consultation with various employee representative organizations. As far as the factories involved in Germany are concerned, the MAHLE management board has recently reached an agreement with the relevant employee representatives on the framework terms and implementation timetable of the personnel adjustment measures announced in 2020. It is particularly worth mentioning that a voluntary resignation compensation program will soon be implemented.

　　As of the end of 2020, the MAHLE Group has approximately 72,000 employees, a decrease of nearly 5,000 compared to the same period last year.

　　Cultivate talents and strive to achieve carbon neutrality

　　At the same time, the MAHLE Group expanded its advanced training courses last year and launched virtual classrooms, electronic toolboxes, and digital learning platforms in response to the current situation.

　　"The key to business success lies in the skills and potential of employees, especially in the current transitional period. This is why attracting, training and retaining the right talent is the top priority. It is especially important to continuously help employees adapt to new technologies and working methods." Ma Anke Felder, member of the management board of Le Group and executive vice president of human resources, said.

　　In the environmental sustainability of production processes and work processes, the MAHLE Group has put more effort into it. For example, it has set quantifiable, binding and clear targets for reducing carbon dioxide emissions.

　　The MAHLE Group is committed to abide by the Paris Agreement. From 2021, all MAHLE plants in Germany will achieve carbon neutral operations; by 2040, MAHLE plans to achieve carbon neutrality in accordance with the scope 1 and 2 of the "Greenhouse Gas Inventory Protocol". At the same time, MAHLE is engaged in active dialogue with its suppliers to ensure that the sustainability concept is also resolutely implemented in its supply chain.

　　2021: Continue to focus on technology transformation to achieve substantial sales growth

　　In 2021, the strategic and operational focus of the MAHLE Group will continue to be structural adjustment and technological transformation.

　　With the tightening of carbon emission policies in various countries, the electrification of automobiles has become an inevitable development trend. In the future, MAHLE will continue to focus on important business sectors, such as mechatronics, hydrogen energy, fuel cells and electric drives. However, the development of new energy vehicles does not happen overnight. In the short term, the internal combustion engine is still the main theme of the industry. According to Mahler’s forecast, by 2030, the share of fully-hybrid and plug-in hybrid vehicles in the global passenger car market will rise from less than 3% today to 20%, while the share of pure electric vehicles will rise from 1% to 16%; in the field of commercial vehicles, pure electric vehicles and hybrid vehicles will account for 18% of the market in 2030.

　　Facing the diversified needs of the market, MAHLE is determined to continue to implement the "dual track strategy". The dual-track strategy means that while continuously improving the efficiency of internal combustion engines and reducing emissions, it actively expands investment in new energy sources and product research and development. Currently, more than 60% of MAHLE Group’s sales come from businesses that have nothing to do with internal combustion engines for passenger cars; by 2030, this proportion will rise to about 75%.

　　Looking forward to the whole year, Michael Frick said: “MAHLE has made a good start in 2021, and its performance in the first quarter has exceeded expectations. Although risks from factors such as the new crown epidemic, delivery bottlenecks, policy adjustments and other factors still exist, the MAHLE Group expects this year Throughout the year, we will be able to achieve significant growth in sales and achieve profitability. To this end, we must strictly follow cost and cash controls