Continental spin-off Vitesco falls flat on market debut


The Vitesco company logo can be seen at Continental’s pilot site for Industry 4.0 applications in Regensburg, Germany on February 28, 2020. REUTERS / Michael Dalder / File Photo

  • Vitesco shares open at 59.8 eur / shr, close at 58.9 eur
  • The prize gives Vitesco a market value of 2.36 billion euros
  • Continental shareholders suffer portfolio loss

BERLIN, Sept. 16 (Reuters) – Shares of Vitesco Technologies (VTSCn.DE) closed lower on Thursday after a volatile market debut as the German parts maker set to cope with the vehicle transition on its own electric after separating from Continental (CONG .DE).

For Continental shareholders, who received one Vitesco share for every five Continental shares they held, the combined value of their six shares at Thursday’s close was 5.6% lower than the value of their five Continental shares on Wednesday.

The spin-off wiped out 3.73 billion euros ($ 4.38 billion) from Continental’s market value, which stood at just under 19 billion euros at market close.

Vitesco, which produces powertrains for international combustion engine cars (ICE) and increasingly hybrid and electric vehicles (EVs), ended the day with a value of 2.36 billion euros.

Continental, one of the world’s largest automotive suppliers producing everything from tires to driver assistance systems, has delayed the Vitesco split for two years due to unfavorable market conditions made worse by the coronavirus pandemic.

“We were faced with developments that no one had anticipated,” said Andreas Wolf, CEO of Vitesco at the Frankfurt Stock Exchange, adding that “the corona crisis has fully confirmed our strategy… electric mobility is booming” .

Vitesco shares started trading at 59.80 euros per share and fluctuated between 56.89 and 66.88 euros during the day. They closed at 58.9 euros.

The list comes as auto suppliers struggle to reorient their production lines to stay relevant amid the transition to EVs, with EVs requiring not only fewer parts but new technologies such as 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 EV components by 2024 and reap three-quarters of the revenue. of EV parts by 2030.

In 2020, Vitesco’s sales fell 12% to € 8 billion as the pandemic combined with a global chip shortage and rising raw material costs hampered sales in the automotive 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)

Reporting by Victoria Waldersee, Arno Schuetze; Additional reporting by Alexander Huebner and Riham Alkousaa Editing by David Evans and Mark Potter

Our Standards: The Thomson Reuters Trust Principles.

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