TIDMTIFS
RNS Number : 4124U
TI Fluid Systems PLC
06 April 2021
6 April 2021
TI Fluid Systems plc
(the "Company")
Annual Report and Accounts 2020 and Annual General Meeting
2021
The Company announces that today it has released the below
listed documents:
-- Annual Report and Accounts for the financial year ended 31
December 2020 ('Annual Report and Accounts 2020')
-- Notice of the Annual General Meeting 2021 ('AGM')
-- Form of Proxy for the AGM
In accordance with Listing Rule 9.6.1, these documents have been
submitted to the National Storage Mechanism and will shortly be
available for inspection at new National Storage Mechanism ('NSM')
https://data.fca.org.uk/#/nsm/nationalstoragemechanism and on the
Company's website at www.tifluidsystems.com .
The AGM is scheduled to be held at 9:00 am on Thursday 13 May
2021 at 2020 Taylor Road, Auburn Hills, Michigan 48326, United
States.
Enquiries:
TI Fluid Systems
plc +1 (248) 376 8624
David J Royce
Investor Relations
FTI Consulting +44 (0)20 3727 1340
Richard Mountain
Nick Hasell
Matthew Paroly +44 (0)1865 871855
Company Secretary
About TI Fluid Systems plc
TI Fluid Systems plc, (LSE: TIFS) is a leading global
manufacturer of highly engineered automotive fluid storage,
carrying and delivery systems primarily for the light duty
automotive market. With nearly 100 years of automotive fluid
systems experience, TI Fluid Systems has manufacturing facilities
in 107 locations across 28 countries serving all major global
OEMs.
Appendix
The information below, which is extracted from the Annual Report
and Accounts 2020, is included solely for the purpose of complying
with DTR 6.3.5 and the requirements it imposes on issuers as to how
to make public annual financial reports. It should be read in
conjunction with the Company's preliminary results announcement
released on 16 March 2021. This announcement is not a substitute
for reading the full Annual Report and Accounts 2020. Page, note
and section references in the text below refer to page numbers,
note and section references in the Annual Report and Accounts
2020.
Statement of Directors' responsibilities in respect of the
financial statements
The Directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law and
regulation.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
have prepared the Group and Company financial statements in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006. Additionally, the
Financial Conduct Authority's Disclosure Guidance and Transparency
Rules require the Directors to prepare the Group financial
statements in accordance with international financial reporting
standards adopted pursuant to Regulation (EC) No 1606/2002 as it
applies in the European Union.
Under company law, Directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and Company and of the
profit or loss of the Group for that period. In preparing the
financial statements, the Directors are required to:
-- select suitable accounting policies and then apply them consistently
-- state whether for the Group and Company, international
accounting standards in conformity with the requirements of the
Companies Act 2006 and, for the Group, international financial
reporting standards adopted pursuant to Regulation (EC) No
1606/2002 as it applies in the European Union have been followed,
subject to any material departures disclosed and explained in the
financial statements
-- make judgements and accounting estimates that are reasonable and prudent
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and Company
will continue in business
The Directors are also responsible for safeguarding the assets
of the Group and Company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Group's and
Company's transactions and disclose with reasonable accuracy at any
time the financial position of the Group and Company and enable
them to ensure that the financial statements and the Directors'
Remuneration report comply with the Companies Act 2006.
The Directors are responsible for the maintenance and integrity
of the Company's website. Legislation in the United Kingdom
governing the preparation and dissemination of financial statements
may differ from legislation in other jurisdictions.
Directors' confirmations
The Directors consider that the Annual Report and Accounts,
taken as a whole, is fair, balanced and understandable and provides
the information necessary for shareholders to assess the Group's
and Company's position and performance, business model and
strategy.
Each of the Directors, whose names and functions are listed in
the Board of Directors section of this report confirm that, to the
best of their knowledge:
-- the Group and Company financial statements, which have been
prepared in accordance with IFRSs adopted pursuant to Regulation
(EC) No. 1606/2002 as it applies in the European Union, give a true
and fair view of the assets, liabilities, financial position and
profit of the Group and profit of the Company
-- the Strategic Review includes a fair review of the
development and performance of the business and the position of the
Group and Company, together with a description of the principal
risks and uncertainties that it faces
This responsibility statement was approved by the Board of
Directors on 15 March 2021 and is signed on its behalf:
By order of the Board
William L. Kozyra, Chief Executive Officer and President
Ronald Hundzinski, Chief Financial Officer
Principal risks and uncertainties
A stable risk profile outlook having weathered 2020
turbulence
The Board is responsible for the Group's system of risk
management and internal controls. The Audit & Risk Committee
supports the Board by advising on the Group's overall risk
appetite, tolerance and strategy, current risk exposures and future
risk strategy.
A review of the Group's risk management framework used to
collate, report and manage business-critical risks was presented to
the Audit & Risk Committee in March 2021. The Board has
concluded that a robust assessment of the Group's principal risks
had been undertaken.
The Group's global operations are exposed to a number of risks
which could, either on their own, or in combination with others,
have an adverse impact on the Group's results, strategy, business
performance and reputation which, in turn, could impact upon
shareholder returns. The following section highlights the major
risks that may affect the Group's ability to deliver the strategy,
as set out on pages 36-37.
The management and mitigation activities described below will
help to reduce the impact or likelihood of the major risk
occurring, although the Board recognises it will not be possible to
eliminate these risks entirely. The Board also recognises there
could be risks that may be unknown or that may be judged to be
insignificant at present, but may later prove to be
significant.
As indicated in our 2019 Annual Report, the COVID-19 pandemic
did introduce operating performance challenges for us and the
automotive industry generally. Disruption to our customers'
production activity levels, the efficiency and operations of the
automotive market supply chain and the availability of resources
was significant at various points during the year. We expressed our
belief in March 2020 that any prolonged or more significant impact
from COVID-19 would manifest itself in the principal risks we had
already identified. This belief was borne out by events in 2020 as
our identified risk mitigation actions enabled us to manage the
uncertain conditions that followed the spread of the virus. Whilst
the importance of certain constituent elements of our risk profile,
e.g. supplier strength and dependency, financial resilience,
operational leverage, took on heightened relevance during 2020,
they did not develop into heightened strategic long-term risks. We
believe that the continuing impact of the pandemic into 2021 will
not introduce new risks beyond those risks that we have already
identified.
Global light vehicle production volumes
Description
The Group has 107 manufacturing locations in 28 countries on
five continents and a substantial amount of its revenue is closely
linked to the economic cycle, the general macroeconomic environment
and the trends in product offerings from the vehicle
manufacturers.
Impact
Historically, there has been close correlation between economic
growth and global light vehicle production volumes. The cost
structure of the business, operating across manufacturing
facilities in 107 locations, means that a large reduction in
revenue will have an impact on profitability. The movement from the
use of the Internal Combustion Engine as the predominant vehicle
power source towards full electrification of vehicles will continue
to necessitate changes in our product portfolio.
Controls and mitigation
-- The Group's presence in 28 countries supplying a wide range
of customers acts as a hedge to neutralise localised economic
volatility
-- The Group has an extensive manufacturing presence in emerging
and other low cost markets which currently have relatively low
rates of light vehicle penetration per head of population and are
believed to have strong growth potential
-- Although the Group's products are primarily for light
vehicles, it operates across both a broad geographic footprint and
a diversified range of vehicle platforms, brands and models
-- A proportion of the Group's workforce in a number of local
markets are employed on temporary contracts, which provides some
flexibility in the cost base
-- The Group monitors closely and responds to any changes in
customer demand on a local or Group-wide basis. Active development
of new and enhanced products to response to the transition to full
electrification remains a major focus. More detail is given in the
Product Development and changes in technology section below
Product quality
Description
The Group's business is based on the repeatable supply and
delivery of components and parts to an agreed specification and
time.
Impact
Failure to meet customer requirements or specifications can have
financial consequences, such as the loss of a customer, warranty
claims and product liability, and cause long-term damage to the
Group's reputation.
Controls and mitigation
-- The Group operates rigorous quality control systems designed
to ensure a high-quality standard for all products, including
testing and validation during the design and production phases
-- The Group collaborates with key customers to evaluate and
improve quality control standards and to confirm the compliance of
its manufacturing processes with customers' quality standards
-- Quality systems and processes operated at local manufacturing
level are subject to oversight by divisional quality teams.
-- Where necessary, the Group's manufacturing facilities
maintain relevant industry accreditations, such as TS 16949
-- The Group monitors the field performance of its products in
order to seek to continuously improve product quality
Competition and customer pricing pressure
Description
This risk encompasses a number of identified global trends in
the markets in which the Group operates. The Group operates in a
dynamic competitive environment and faces competition from other
manufacturers and suppliers of automotive components in each of the
market segments in which it operates. The Group may be subject to
pressure from customers to reduce costs on current contracts. The
environment for bidding and securing new contract awards from OEMs
is competitive.
Impact
The Group's customers face constant pressure to lower their
selling and production costs to be competitive against their peers
and may require reductions in the selling price of the Group's
systems and components over the term of a vehicle platform or
model. Commercial activity by competitors, or changes in their
products or technologies, could impact upon the Group's market
share and profitability.
Controls and mitigation
-- The Group seeks to offset pricing pressure by achieving
improved operating efficiencies and cost reductions
-- A growing trend by customers to standardise and globalise
vehicle platforms has the potential to minimise the Group's
exposure to the cancellation of any single vehicle platform or
model
-- The Group has a strong reputation and industry-leading
technology which supports its status as a key supplier to its
customers
-- The Group engages in extensive and regular dialogue and has strong commercial and engineering relationships with key customers
-- The Group uses market intelligence and competitor analysis to
support its market activities and inform investment decisions
-- Across the Group there is an emphasis on research and
development and improving the technical content of products
-- The Group also leverages a robust screening process to evaluate new business proposals
-- The Group is considered to be a top supplier or strategic
supplier by many of its OEM customers
Business continuity
Description
The Group's business is based upon reliable, high-volume
manufacturing across all its locations in order to supply products
to customers, often on a just-in-time basis. Business continuity
encompasses a number of areas of risk to the Group, including fire,
flood and other casualties, equipment breakdown, key supplier
failure, exposure to price fluctuations of key raw materials,
maintaining stable labour relations, and ensuring the reliability
of the Group's business management systems and IT infrastructure.
In addition, the Group is exposed to risks from accidents and
incidents arising from health and safety failures.
Impact
A loss of production capability at a facility could lead to an
inability to supply customers, reduce volumes and/or increase
claims made against the business. In periods of high demand or in
the event of supplier difficulties, availability of raw materials
may be constrained which could interrupt production or result in
price increases, all of which could have an impact on the
profitability of the Group's operations. In certain circumstances
the loss of a supplier, or supplier quality failing, could lead to
an inability to obtain materials and sub-components necessary to
supply products in a timely or efficient manner. As our product
portfolio pivots in response to the electrification trend the
capability and capacity of our current supply base to respond may
heighten risk.
The loss of systems capability at a Group facility, as a result
of IT failure or cyber-attack, could impact the Group's ability to
operate one or more plants and supply its customers. Injuries
arising from health and safety incidents could result in lost time,
reduce employee morale and possible changes in working practices.
Serious incidents can also have a detrimental impact on the Group's
reputation.
Controls and mitigation
-- The Group continues to expand its business continuity
planning ('BCP') to enhance the localised continuity planning
strategy operated at each facility
-- The Group's global network of facilities provides a degree of backup capacity
-- The Group maintains a scheduled programme of maintenance and inspection of all equipment
-- The wide geographic spread of operations, purchasing and
supply chain functions allows the Group to use a range of
techniques to address potential supply disruption, such as
long-term purchase contracts, dual sourcing and ongoing research
and development into alternative materials and solutions
-- In certain markets the Group uses preferred suppliers for key components and materials
-- The Group maintains casualty, property and business interruption insurance
-- The Group participates in a number of works councils and
other represented employee forums and seeks to establish and
maintain good relationships with its employees and unions
-- The Group continues to assess and strengthen its cyber
security programme. The Group has continued to expand its systems
penetration testing and data security audits
-- The Group's decentralised IT systems worldwide provide some
resilience against the loss of production or systems capability to
the Group as a whole
-- IT has a disruption recovery plan for the organisation
-- The Group has an embedded health and safety culture and
operates a global health and safety policy, with local health and
safety operations in place in each manufacturing facility
-- In 2020 our health and safety protocols were enhanced in
response to COVID-19 such as to facilitate safe return to our
operating facilities when permitted. Our IT infrastructure has been
able to support the seamless operation of our worldwide office and
administrative functions when remote working has been in place
-- Health and safety performance is monitored regularly by each division and by the Group
Product development and changes in technology
Description
The automotive industry is subject to changes in technology and
the Group's products are subject to changes in regulatory
requirements to reduce emissions and increase fuel economy.
Operating across numerous markets and territories requires
compliance with a wide variety of regulations. Changes in consumer
demand, e.g. the popularity of a particular vehicle type, model,
platform or technology such as HEVs and BEVs, may also impact on
demand for the Group's products. In addition, the Group's products
have performance-critical applications and have high levels of
technical content and know-how.
Impact
Failure to keep up with changes in technology in the light
vehicle automotive industry or in competitive technologies may
render certain existing products obsolete or less attractive as
well as damage the Group's market position and reputational
strength. Failure to comply with all relevant regulatory
requirements could affect the Group's reputation and/or its ability
to operate in certain markets or territories. Changing
environmental regulations could affect demand for certain products.
The Group's technologies and intellectual property rights need to
be kept current through continuous improvement and research and
development and are susceptible to theft, infringement, loss and/or
replication by competitors.
Controls and mitigation
-- The Group is engaged in continued investment in alternative
engineering solutions and the development of more advanced designs
and innovative products to ensure compliance with
-- changes to environmental regulations and customer demand
-- The Group has an international network of four technical
centres which focus on research and development
-- The Group seeks to maintain close relationships and technical partnerships with key customers
-- The Group has established eight regional application centres
which focus on application engineering worldwide
-- Both Group and divisional management monitor and assess
relevant regulatory requirements and the likelihood and impact of
any changes
-- The Group's products, materials and processes are continually
developed and enhanced through research and development and
technical input
-- The Group actively registers, manages and enforces its intellectual property rights
-- The Group operates in the automotive industry where
performance-critical technology evolves and is adopted in a
deliberate and measured manner
Operating globally and regulatory compliance
Description
The Group has operations globally, with manufacturing facilities
in 28 countries across five continents. The markets in which the
Group operates are covered by a range of different regulatory
systems and complex compliance requirements and may also be subject
to cycles, structural change and other external factors, such as
changes in tariffs, customs arrangements and other regulations. In
addition, operating across a number of territories exposes the
Group to currency exchange rate variations.
Impact
A substantial downturn in one or more key markets could have a
material adverse impact on the Group's profitability, cash flow and
carrying value of its assets. Significant changes to the different
regulatory systems and compliance requirements in and between the
countries and regions in which the Group operates may have a
negative impact on the Group's operations in a particular country
or market. The accelerating pace of change towards full
electrification of vehicles is expected to bring tightening
legislative requirements. High foreign exchange volatility may
increase financing costs.
Controls and mitigation
-- The Group's international footprint provides some protection
against a downturn in particular territories or regions
-- The markets and any changes to the regulatory environment in
which the Group operates, including tariffs and trade policies, are
continually monitored and assessed
-- Changes to the Group's investment strategy and crossborder
relocation might result from a significant change in the regulatory
environment in a particular country or region
-- The Board is actively monitoring the opportunities and
threats posed by climate change to both the Group's product
offering and its operations and proactively refocusing development
and engineering work in this area
-- The Group's treasury policy covers, inter alia, the use of
currency contracts, investment hedging policy and regular reporting
of foreign exchange exposure
-- Focus throughout the Group on adherence to our Code of
Business Conduct ('COBC'), including ongoing training and review of
policies and procedures
Key personnel dependencies
Description
The future success of the Group is dependent upon the continued
services of key personnel. Succession is a routine consideration
given some of the Group's key global positions at all levels,
including business unit, division and Group.
Impact
The Group competes globally to attract and retain personnel in a
number of key roles. A lack of new talent, the inability to retain
and develop existing talent, or replace retiring senior management
could hinder the Group's operations and strategy. A loss of key
personnel, with associated intellectual property and know-how,
could disrupt our business and strategy. In a number of local
markets the Group may experience a shortage of skilled and
experienced personnel for certain key roles. Global social trends
and events may focus current and potential employees on the
desirability of our businesses as a place of employment.
Controls and mitigation
-- The Group applies bespoke terms and conditions of employment
for key personnel where appropriate
-- The Group has in place incentive arrangements, including
bonuses, pensions and long-term incentive plans
-- The Group is enhancing its activities to further embrace
equality and diversity across its operations. Culture awareness
training is ongoing across our organisation
-- The Group operates established recruitment and development programmes
-- Succession plans continue to be reviewed for relevant key positions
Developing risks
The Board recognises that an essential part of risk management
is the ability to monitor and respond to new and emerging risks.
Throughout 2020 the Board met regularly to consider and respond to
the developing operational and financing challenges posed as the
result of the spread of the COVID-19 pandemic. These discussions
were also conscious of any new strategic risks that were starting
to emerge. Such strategic discussions focus on risks that may arise
in terms of technological obsolescence, product portfolio
redundancies and customer (OEM) consolidation. The Board is acutely
aware of the changing market dynamics that may arise from climate
change and the growing demand for hybrid and battery electric
vehicles. The Board feels that the Group is well positioned to
respond positively to these market changes based on its technology,
thermal product portfolio and electrification strategy. The current
year robust assessment is that there are no new risks that are
material to the Group.
There has been notable commentary so far in 2021 about the
impact on the automotive industry of the current supply problems
relating to micro-chips. The Board has been monitoring these
developments and believe that these issues will only represent a
short-term impact on automotive volume levels and that this does
not represent a material risk to our Group at this stage.
The Board intends to continue to assess emerging risks.
Related Party Transactions
Related Party Transactions and Controlling Parties
Transactions with Affiliates of the funds managed by Bain
Capital
The 'funds managed by Bain Capital' represent affiliates of and
funds advised by Bain Capital LLC. During the year, the Group did
not procure products and materials from companies in which the
funds managed by Bain Capital, the Group's ultimate controlling
party since 30 June 2015, had investment interests (2019: EUR0.2
million). These transactions were completed on the basis of normal
commercial terms.
The Group does not incur management charges from Bain Capital
LLC.
Transactions with Group Companies
Balances and transactions between Group companies have been
eliminated on consolidation, and are not disclosed in this note
except for subsidiaries that are not wholly owned. Transactions
with those companies are made on the Group's standard terms of
trade.
The Group holds 73% of the shares in Hanil Tube Corporation
('Hanil') which is located in South Korea. At 31 December 2020,
Hanil had trade and loan receivables net of payables from other
Group undertakings amounting to EUR31.4 million (2019: EUR25.6
million) and made sales within the Group during the year of EUR6.8
million (2019: EUR7.3 million).
The Group holds 97% of the shares in Bundy India Ltd. At 31
December 2020, Bundy India Ltd had trade and loan payables net of
receivables to other Group undertakings amounting to EUR4.1 million
(2019: EUR6.1 million) and made sales within the Group during the
year of EUR6.1 million (2019: EUR8.4 million).
Ultimate controlling party
The funds managed by Bain Capital, via BC Omega Holdco Ltd, have
been the Company's ultimate controlling party since its
incorporation.
Transactions with Associates
2020 2019
EURm EURm
Amounts owed to associates 1.1 1.3
------ ------
Purchases from associates
in the year 8.1 10.5
------ ------
Transactions with related parties other than subsidiaries are
attributable solely to the ordinary business activities of the
respective company and were conducted on an arm's-length basis.
END
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
ACSDKPBQQBKDBQK
(END) Dow Jones Newswires
April 06, 2021 02:00 ET (06:00 GMT)
Ti Fluid Systems (LSE:TIFS)
Historical Stock Chart
From Mar 2024 to Apr 2024
Ti Fluid Systems (LSE:TIFS)
Historical Stock Chart
From Apr 2023 to Apr 2024