Versigent's cash target rises even as underlying sales growth slows
The newly independent vehicle-wiring supplier expects more free cash flow. Adjusted sales growth has slowed, while investment in new launches keeps quarterly free cash flow below a year ago.
Versigent raised its annual free-cash-flow forecast while leaving the midpoint of its adjusted profit target unchanged. The vehicle-wiring supplier expects more cash from the same central earnings estimate as it navigates its first year outside Aptiv.
The company now expects $275 million to $325 million of free cash flow in 2026, compared with the $200 million to $300 million range reaffirmed in August. It calculates free cash flow as operating cash less capital spending. Both forecasts include about $70 million of separation costs.
Research by Ticker Byline shows that the cash forecast's midpoint increased 20%, to $300 million from $250 million. The annual adjusted EBITDA midpoint stayed at $990 million as its range narrowed.
| Measure | August range | November range |
|---|---|---|
| Free cash flow | $200–$300 | $275–$325 |
| Adjusted EBITDA | $950–$1,030 | $970–$1,010 |
| Net sales | $9,400–$9,600 | $9,500–$9,600 |
Cash expectations improve as sales growth slows
Third-quarter net sales rose 7.2% to $2.45 billion. After removing commodity-price and currency movements, sales growth was about 1%, compared with roughly 5% in the second quarter. Higher commodity costs passed through to customers also explain the increase in the annual sales forecast.
Profitability improved. Adjusted EBITDA, earnings before interest, taxes, depreciation and amortization with specified costs removed, reached $275 million from $248 million. Its margin increased to 11.2% from 10.8%, helped by pricing and operational execution. Commodity and currency changes together partly offset that margin improvement.
Quarterly operating cash flow was $225 million against $223 million a year earlier. Capital spending rose to $55 million from $44 million as Versigent supported new launches, leaving free cash flow at $170 million versus $179 million.
Over nine months, free cash flow was $247 million, below last year's $290 million. Cash separation costs rose to $59 million from $14 million, alongside the heavier investment.
A new standalone financing structure
Net income attributable to Versigent fell to $102 million from $109 million. Interest expense was $36 million following the financing arranged around its April separation from Aptiv. That expense was already present in the second quarter; last year's figures reflected the business before the spin-off.
Versigent ended September with $638 million of cash and cash equivalents and an undrawn $850 million revolver. The Versigent company profile sets out the debt supporting the new standalone company and the costs still to come from restructuring.