WABCO Holdings Inc., the leading global supplier of braking control systems and other advanced technologies that improve the safety, efficiency and connectivity of commercial vehicles, has reported Q4 and full year 2018 results.
WABCO Q4 2018
“In Q4 2018, WABCO faced a slowdown in key global markets, notably in Europe as well as China and India, which was partially offset by growth in the Americas, Japan and Thailand,” says Jacques Esculier, WABCO Chairman and Chief Executive Officer.
“Navigating this environment, WABCO again demonstrated its resilience and proven ability to continue to outperform global truck and bus production,” says Esculier. “Further helped by a favorable tax resolution, WABCO also achieved record quarterly earnings per share on a performance basis.”
WABCO Full Year 2018
“On a full year basis, WABCO propelled sales to a record level of over $3.8 billion, up 15.9% from the previous year and up 13.9% in local currencies,” says Esculier. “Marking its twelfth consecutive year of solid outperformance of the commercial vehicle industry, WABCO also delivered record performance operating income of $545.7 million and record annual earnings per share on a performance basis, up 14.7% versus a year ago.”
In 2018, in spite of significant industry supply chain challenges, WABCO still delivered a solid 5.0% of gross materials productivity and 7.7% of conversion productivity totaling $74.9 million of net savings.
WABCO also continued to strongly convert income into cash in 2018, resulting in net cash from operating activities of $468.5 million, up 11.2% versus the prior year.
WABCO Share Buyback Program
During the fourth quarter of 2018, WABCO repurchased 808,964 shares for $90 million through its share buyback program. Between June 2011 and December 31, 2018, WABCO repurchased 21,807,366 shares for $1,891 million in open market transactions. This includes the repurchase of shares during 2018 for a total of $300 million. As previously reported, WABCO is further authorized to repurchase shares up to a total of $600 million through December 31, 2020. WABCO intends to repurchase $400 million of shares in 2019, subject to market conditions and applicable legal and regulatory requirements.
WABCO Announces New Corporate Headquarters
As part of its change in organizational logic, WABCO decided to relocate its corporate headquarters to Bern, Switzerland, with the objective of creating a singular focus on fully globalizing WABCO’s advanced technology strategy. The current Brussels base will become the headquarters of its newly formed division covering Europe, Middle East and Africa.
“Decoupling WABCO’s corporate headquarters from its four business regions creates a better platform to globally manage the next wave of advanced technologies and scale their adoption in all regions of the world,” says Esculier. “Switzerland is world-renowned for providing a highly favorable environment for breakthrough innovations and offers many distinct advantages for corporate headquarters.”
Recent WABCO Highlights
In Q4 2018, WABCO disclosed that it had extended and expanded its relationship with one of the world’s top original equipment manufacturers (OEMs) by signing a $950 million long-term agreement. Under the 8-year agreement, WABCO will equip two of the OEM’s brands with its leading braking, advanced driver assistance systems (ADAS) and efficiency technologies. Representing a further industry endorsement of WABCO’s global leadership in braking system platforms, this agreement confirms WABCO as the OEM’s sole supplier for electronic braking systems (EBS) in Europe. The OEM also is confirmed as WABCO’s lead customer for its next generation OnGuardACTIVE Advanced Emergency Braking System (AEBS) solution. With more than 450,000 OnGuard safety systems sold world-wide, WABCO is the global industry leader, independent of OEMs, for collision mitigation systems and ADAS.
WABCO disclosed in January 2019 that it had entered a global long-term agreement to supply its next generation automated manual transmission (AMT) control technology to Daimler, one of the world’s largest commercial vehicle producers. WABCO will develop and introduce its next generation AMT control technology into Daimler’s global truck and bus series production. With a lighter-weight, robust and more compact design, WABCO’s new gearbox control unit reduces noise levels, optimizes gear shifting performance and increases driver comfort. In addition, the innovative new system is designed to support an extensive range of different truck types, gearboxes and market specific functionalities, which will support global AMT technology to further increase penetration in all regions. With more than four million systems sold, WABCO is the global market leader for AMT control solutions.
In Q4 2018, WABCO reported that it had signed a long-term agreement with Hyundai Motor Company, South Korea’s leading manufacturer of commercial vehicles. Under this latest supply agreement with Hyundai, WABCO will furnish the manufacturer with a broad portfolio of its advanced technologies to support series production of Hyundai’s new medium-duty trucks. WABCO will equip Hyundai's range of medium-duty trucks with EBS, anti-lock braking systems (ABS), electronic stability control (ESC) and electronically controlled air suspension (ECAS) systems as well as air processing units (APU). WABCO also will become the first supplier to equip Hyundai with EBS and integrated pedal units (IPU) for its medium-duty trucks.
In February 2019, WABCO announced that it had signed a long-term agreement to develop and supply innovative air suspension technology for one of the world’s largest manufacturers of premium passenger cars, based in Europe. Under this 10-year agreement, WABCO will develop and deliver an innovative air supply module along with control software to operate a range of air suspension system configurations for one of the manufacturer’s high-volume global premium passenger car platforms. Air suspension is now a standard feature on most of the manufacturer’s electric and plug-in hybrid vehicles, so WABCO will support a 30% increase in air suspension production volumes compared to the manufacturer’s preceding car platform.
WABCO Full Year 2019 Guidance
Based on its estimate of future economic and market conditions, WABCO provides guidance for 2019.
“WABCO remains laser-focused in its commitment to deliver continued market outperformance, which fuels top-line growth and delivers enhanced bottom-line results,” says Esculier. “We also reaffirm our unwavering confidence in our ability to again deliver superb value for shareowners in 2019.”
