Auto parts maker strives to top $450 mil. in profits
In the past, Hanon Systems was a Korean auto parts supplier that relied almost entirely on Hyundai Motor and Kia Motors, the country’s two leading automobile makers.
But the Daejeon-based company has diversified its customer base to such international players as Tesla, BMW, and Volkswagen to reduce its dependence on Hyundai Motor Group.
Now, the outfit strives to increase its profits more than 20 percent in 2019 from a year ago based on its new customers and a large-sized M&A, which finished late last month.
The country’s brokerage houses expect on average that Hanon would chalk up $459 million in profits this year, up 20.9 percent from last year’s $380 million.
Completion of M&A
On top of its global clients, the recent M&A also help boost the firm’s bottom lines.
On March 29, Hanon announced that it completed the takeover of the Fluid Pressure & Controls business of Magna International for around $1.2 billion.
“This transaction is a significant milestone in the history of Hanon Systems and strengthens its position in the automotive thermal management sector,” said Yoon Yeo-eul, Hanon’s chairman of the board. He also heads Hahn & Company, the major shareholder of Hanon.
“The new Hanon Systems – with its competitive technology and innovative capabilities, expanded the global footprint and highly regarded talented pool – is well-equipped to support global automakers and the industry shift toward e-mobility.”
Hanon has tried to purchase the business on the belief that the acquisition would strengthen its competitive edge.
“The transaction involves nine manufacturing and engineering facilities across Europe, North America and Asia, and approximately 4,100 employees. Based on 2018 results, the combined business would have generated annual revenue of $6.9 billion,” a Hanon official said.