Continental spin-off Vitesco struggles to make market debut By Reuters

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© Reuters.

By Victoria Waldersee and Arno Schuetze

BERLIN (Reuters) – Vitesco Technologies shares were broadly flat Thursday in a volatile first market that highlights the challenges faced by the German auto parts maker derived from Continental.

The stagnation in the share price, combined with a decline in Continental’s stock price from Wednesday’s close, left Continental shareholders left with a drop in the value of their holdings as a result of the the split.

Continental shareholders received one Vitesco share for every five Continental shares they owned. At 1506 CET, that was worth around 5% less than five Continental shares at yesterday’s market close.

Continental, one of the world’s largest automotive suppliers, has delayed the spin-off of Vitesco – which produces powertrains for internal combustion engines (ICE (NYSE :)), hybrid and electric cars – by two years. due to unfavorable market conditions made worse by the coronavirus pandemic.

“We have been faced with developments that no one had foreseen,” Vitesco CEO Andreas Wolf told the Frankfurt stock exchange, adding that “the corona crisis has fully confirmed our strategy … electric mobility is in full swing boom “.

Vitesco shares started trading at 59.80 euros per share and fluctuated between 56.89 and 66.88 euros during the day. At 3:06 p.m. GMT, they were trading at around 58.7 euros per share, giving the company a market value of 2.34 billion euros ($ 2.75 billion).

The list comes as auto suppliers struggle to reorient their production lines to stay relevant amid the transition to electric vehicles, with electric cars requiring not only fewer parts, but also new technologies like batteries and software. – not traditionally the expertise of the German automotive industry.

Vitesco currently derives the vast majority of its revenue from ICE car parts, but Wolf told Reuters this month he hopes to break even sales of electric vehicle components by 2024 and reap three-quarters. electric vehicle parts revenue by 2030.

In 2020, Vitesco’s sales fell 12% to € 8 billion as the COVID-19 pandemic combined with a global chip shortage and increased raw material supplies hampered sales in the automobile industry.

Still, sales for the first half of 2021 are up 29% from the previous year to 4.4 billion euros, with a profit margin of 1.9%.

($ 1 = 0.8510 euros)

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